Use the following information to compute the cost of direct materials used for the current year. (Assume no indirect materials.) January 1 December 31 Inventories Raw materials inventory $ 8,700 $ 8,900 Work in process inventory 12,400 11,800 Finished goods inventory 11,400 7,300 Activity during current year Materials purchased $ 133,000 Direct labor 94,800 Factory overhead 41,400

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Business

Leonel

29 November, 04:32

Use the following information to compute the cost of direct materials used for the current year. (Assume no indirect materials.) January 1 December 31 Inventories Raw materials inventory $ 8,700 $ 8,900 Work in process inventory 12,400 11,800 Finished goods inventory 11,400 7,300 Activity during current year Materials purchased $ 133,000 Direct labor 94,800 Factory overhead 41,400

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Maryjane Bartlett · Answer 1

The cost of direct materials used for the current year is $132,800

Explanation:

For computing the cost of direct material used, we have to use the formula which is shown below:

= Opening balance of raw material inventory + Purchase of raw material - ending balance of raw material inventory

where,

Opening balance of raw material inventory is $8,700

Purchase of raw material is $133,000

And, the ending balance of raw material inventory is $8,900

= $8,700 + $133,000 - $8,900

= $132,800

The remaining information which is given is irrelevant. Therefore, it is ignored.

Hence, the cost of direct materials used for the current year is $132,800