Selected data concerning the past year's operations of the Motor City Corporation are as follows: The cost of direct materials purchased is
A) $467,500.
B) $460,000.
C) $437,500.
D) $445,000.

Question

Selected data concerning the past year's operations of the Motor City Corporation are as follows:   The cost of direct materials purchased is
A) $467,500. 
B) $460,000. 
C) $437,500. 
D) $445,000.

Quizplus · Accepted Answer

The cost of direct materials purchased can be calculated as:
Beginning raw materials inventory + Purchases - Ending raw materials inventory = Cost of direct materials purchased
$100,000 + Purchases - $115,000 = $445,000
Purchases = $460,000
Therefore, the correct answer is B.

Selected Data Concerning the Past Year's Operations of the Motor