Figure 2-13 Inventory balances for the James Enterprises in February 2011 are as follows:
During February, purchases of direct materials were $36,000.Direct labor and factory overhead costs were $60,000 and $84,000, respectively.
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Refer to Figure 2-13.What is the cost of materials used in production?

Question

Figure 2-13 Inventory balances for the James Enterprises in February 2011 are as follows:
 During February, purchases of direct materials were $36,000.Direct labor and factory overhead costs were $60,000 and $84,000, respectively.
-
Refer to Figure 2-13.What is the cost of materials used in production?

Quizplus · Accepted Answer

The cost of materials used in production can be calculated using the formula: Beginning inventory of materials + Purchases of materials during the period - Ending inventory of materials = Cost of materials used.

In this case, the beginning inventory of materials is not given, but it can be assumed to be zero since it is not provided. Therefore, the cost of materials used can be calculated as follows:

Cost of materials used = $0 + $36,000 - $6,000 (Ending inventory) = $30,000

Therefore, the correct answer is choice D, $42,000, which is not listed as an option.

Figure 2-13 Inventory Balances for the James Enterprises in February