Richards Company The following information has been taken from the cost records of Richards Company for the past year: Raw material used in production $326 Total manufacturing costs charged to production during 686 the year (includes direct material, direct labor, and overhead equal to 60% of direct labor cost) Cost of goods available for sale 826 Selling and Administrative expenses 25
Inventories Begining Ending

Raw material 75 $85

Work in process 80 30
Finished goods 90 110
Refer to Richards Company.The cost of raw material purchased during the year was

Question

Richards Company
The following information has been taken from the cost records of Richards Company for the past year:
Raw material used in production                                                $326
Total manufacturing costs charged to production during            686
the year (includes direct material, direct labor, and
overhead equal to 60% of direct labor cost)
Cost of goods available for sale                                                  826
Selling and Administrative expenses                                           25

Inventories	Begining	Ending
Raw material	75	$85
Work in process	80	30
Finished goods	90	110

Refer to Richards Company.The cost of raw material purchased during the year was

Quizplus · Accepted Answer

The cost of raw material purchased can be calculated by adding the opening inventory of raw materials to the purchases during the year and subtracting the closing inventory of raw materials. 
Opening inventory of raw materials = $85 
Closing inventory of raw materials = $71 
Raw materials used = $172 
Purchases = Raw materials used + Closing inventory of raw materials - Opening inventory of raw materials 
Purchases = $172 + $71 - $85 = $158 
Therefore, the cost of raw material purchased during the year was $336 (Option B).

Richards Company The Following Information Has Been Taken from the Cost Records