Gammil Company has beginning and ending raw materials inventories of $96,000 and $120,000, respectively.If direct materials used were $440,000, what was the cost of raw materials purchased?
A)$440,000.
B)$470,000.
C)$416,000.
D)$464,000.

Question

Quizplus · Accepted Answer

The cost of raw materials purchased can be calculated using the formula: Beginning Inventory + Purchases - Ending Inventory = Direct Materials Used. Rearranging gives Purchases = Direct Materials Used + Ending Inventory - Beginning Inventory. So, $440,000 + $120,000 - $96,000 = $464,000.

Gammil Company Has Beginning and Ending Raw Materials Inventories of $96,000