Exhibit 18-3 Thorne Chemicals makes cleaning solution. The following information is available on December 1, 2011:

- Refer to Exhibit 18-3. Given the information above, the cost of materials used in production for the month of December will be:

Question

Exhibit 18-3 Thorne Chemicals makes cleaning solution. The following information is available on December 1, 2011:

- Refer to Exhibit 18-3. Given the information above, the cost of materials used in production for the month of December will be:

Quizplus · Accepted Answer

The cost of materials used in production for the month of December can be calculated as follows: Beginning raw materials inventory + Purchases of raw materials – Ending raw materials inventory. 
Beginning raw materials inventory = $0
Purchases of raw materials = $3,220 + $27,500 = $30,720
Ending raw materials inventory = $4,454
Therefore, cost of materials used in production = $0 + $30,720 - $4,454 = $26,266. However, the question is asking for the cost of materials used in production for the month of December, which is a subset of the total raw materials used in producing cleaning solution. Therefore, we need to divide this amount by the total production in December: 
$26,266 ÷ 8,040 gallons = $3.266 per gallon. 
Therefore, the cost of materials used in production for the month of December will be $3,266. Option C is correct.

Exhibit 18-3 Thorne Chemicals Makes Cleaning Solution