The accounting records of Omar Corporation contained the following information for last year: The amount of direct material purchased during the year was:
A) $66,000
B) $70,000
C) $65,000
D) $74,000

Question

The accounting records of Omar Corporation contained the following information for last year:  The amount of direct material purchased during the year was:
A) $66,000 
B) $70,000 
C) $65,000 
D) $74,000

Quizplus · Accepted Answer

The amount of direct material used in production can be calculated as follows: 
Direct material used = Beginning raw materials inventory + Purchases during the year - Ending raw materials inventory 
Direct material used = $22,000 + $70,000 - $18,000 
Direct material used = $74,000 - $18,000 
Direct material used = $56,000 
Therefore, the amount of direct material purchased during the year was $70,000 (option B).

The Accounting Records of Omar Corporation Contained the Following Information