During the month of January, Marcos & Henesey, Inc. had total manufacturing costs of $165,000. It incurred $62,000 of direct labor cost and $40,000 of manufacturing overhead cost during the month. If the materials inventory on January 1 was $5,800 less than the materials inventory on January 31, what was the cost of materials purchased during the month?
A)$53,650
B)$68,800
C)$58,000
D)$93,800

Question

Quizplus · Accepted Answer

The cost of materials used in production is found by adding the direct labor and manufacturing overhead costs to the total manufacturing costs, then subtracting the sum from the total manufacturing costs. This gives us $165,000 - ($62,000 + $40,000) = $63,000. Since the materials inventory increased by $5,800 from the beginning to the end of the month, the cost of materials purchased is the cost of materials used plus the increase in inventory, or $63,000 + $5,800 = $68,800.

During the Month of January, Marcos & Henesey, Inc