Inventory balances for the James Enterprises in February are as follows:
$\begin{array}{lrr}
&\text { February } 1&\text { February } 28\
\text { Raw materials } & \$ 27,000 & \$ 21,000 \
\text { Work in process } & 48,000 & 37,200 \
\text { Finished goods } & 108,000 & 90,000
\end{array}$ During February,purchases of direct materials were $36,000.Direct labour and factory overhead costs were $60,000 and $84,000,respectively.
-Refer to the figure.What is the cost of materials used in production?
A)$36,000
B)$42,000
C)$47,800
D)$54,000

Question

Quizplus · Accepted Answer

The cost of materials used in production is calculated as the beginning raw materials plus purchases minus the ending raw materials: $ \$27,000 + \$36,000 - \$21,000 = \$42,000 $.

Inventory Balances for the James Enterprises in February Are as Follows