A company has the following information for the current month of operations: $\begin{array}{lr}
\text { Raw materials used } & \$ 37,500 \
\text { Sales } \$ 97.50 \text { per unit) } & \$ 117,000 \
\text { Direct labor } & \$ 63,000 \
\text { Variable factory overhead } & \$ 25,500 \
\text { Fixed factory overhead } & \text { unknown } \
\text { Variable selling and administrative } & \$ 4,500 \
\text { Fixed selling and administrative } & \$ 7,500 \
\text { Gross profit } & \$ 45,000 \
\text { Contribution margin } & \text { unknown }\\
\text { Inventories: }&\text { Beginning}&\text { Ending }\
\text { Raw materials } & 0 & \$ 12,500 \
\text { WIP } & 0 & \text { none } \
\text { Finished goods } & 0 & 1,200\text { units }
\end{array}$ Raw materials purchased during the current period are_____.
A)$37,500
B)$50,000
C)$27,000
D)none of these answers is correct.

Question

Quizplus · Accepted Answer

The raw materials purchased during the current period can be calculated by adding the raw materials used to the ending inventory of raw materials and then subtracting any beginning inventory of raw materials. Since there was no beginning inventory, the calculation is simply $37,500 (raw materials used) + $12,500 (ending inventory) = $50,000.

A Company Has the Following Information for the Current Month