The following data have been provided by a company:
Compute the amount of direct materials used during November if $20,000 in raw materials were purchased during the month.

Question

The following data have been provided by a company: 
Compute the amount of direct materials used during November if $20,000 in raw materials were purchased during the month.

Quizplus · Accepted Answer

There is not enough information to directly calculate the amount of direct materials used during November. However, if we assume that all of the raw materials purchased were used during the month (meaning there was no ending inventory of raw materials), then the amount of direct materials used would be equal to the amount of raw materials purchased, which is $20,000. Therefore, choice A is the best option, but it is based on an assumption.

The Following Data Have Been Provided by a Company