Inventory balances for the Jameson Company in October 2018 are as follows: $$\begin{array} { l c c }
& \text { October } 1,2018 & \text { October } 31,2018 \
\text { Raw materials } & \$ 27,000 & \$ 21,000 \
\text { Work in process } & 48,000 & 37,200 \
\text { Finished goods } & 108,000 & 90,000
\end{array}$$
During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively.
What is the cost of materials used in production?
A)$36,000
B)$42,000
C)$47,800
D)$54,000

Question

Inventory balances for the Jameson Company in October 2018 are as follows: $$\begin{array} { l c c } 
& \text { October } 1,2018 & \text { October } 31,2018 \
\text { Raw materials } & \$ 27,000 & \$ 21,000 \
\text { Work in process } & 48,000 & 37,200 \
\text { Finished goods } & 108,000 & 90,000
\end{array}$$
During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively.
What is the cost of materials used in production?
A)$36,000
B)$42,000
C)$47,800
D)$54,000

Quizplus · Accepted Answer

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

Inventory Balances for the Jameson Company in October 2018 Are