Tyare Corporation had the following inventory balances at the beginning and end of May:
During May, $58,500 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,050 of direct materials cost. The Corporation incurred $42,000 of actual manufacturing overhead cost during the month and applied $39,600 in manufacturing overhead cost.
-The direct materials cost in the May 1 Work in Process inventory account totaled:
A) $9,900
B) $5,400
C) $9,000
D) $4,500

Question

Tyare Corporation had the following inventory balances at the beginning and end of May:
  During May, $58,500 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,050 of direct materials cost. The Corporation incurred $42,000 of actual manufacturing overhead cost during the month and applied $39,600 in manufacturing overhead cost.
-The direct materials cost in the May 1 Work in Process inventory account totaled:
A) $9,900 
B) $5,400 
C) $9,000 
D) $4,500

Quizplus · Accepted Answer

Beginning work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied to work in process
Direct material = Beginning work in process inventory - Direct labor - Manufacturing overhead applied to work in process
Direct material = $13,500 - ($15 per direct labor-hour × 300 direct labor-hours) - ($12 per direct labor-hour × 300 direct labor-hours)
Direct material = $13,500 - $4,500 - $3,600 = $5,400

Tyare Corporation Had the Following Inventory Balances at the Beginning