At May 31, 2016, Smythe Inc.has $4,500 in beginning raw materials, $6,000 of direct labour.If manufacturing overhead was $10,500, total manufacturing costs was $50,500, and total raw material purchases were $36,000, how much is ending amount of raw materials?
A)$36,000
B)$21,000
C)$40,500
D)$6,500

Question

Quizplus · Accepted Answer

To find the ending raw materials, use the formula: Beginning Raw Materials + Purchases - Raw Materials Used = Ending Raw Materials. Raw Materials Used can be found by subtracting Direct Labour and Manufacturing Overhead from Total Manufacturing Costs: $50,500 - $6,000 - $10,500 = $34,000. Then, $4,500 + $36,000 - $34,000 = $6,500.