Question

Use the following information to compute the cost of direct materials used for the current year. Assume the raw materials inventory account is used only for direct materials. (Assume no indirect materials.)

January 1 December 31
Inventories Raw materials inventory $6,700 $11,000
Work in process inventory 12,400 11,600
Finished goods inventory 10,900 7,500
Activity during current year Materials purchased $127,000
Direct labor 103,200
Factory overhead 47,700

Answer 1

Answer:

Direct material used= $122,700

Explanation:

Giving the following information:

January 1 December 31

Inventories Raw materials inventory $6,700 $11,000

Activity during current year Materials purchased $127,000

To calculate the direct material used, we need to use the following formula:

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 6,700 + 127,000 - 11,000

Direct material used= $122,700