The following information relates to the manufacturing operations of the IMH Publishing Corporation for the year: The raw materials used in manufacturing during the year totaled $118,000. Raw materials purchased during the year amount to:
A) $107,000.
B) $115,000.
C) $118,000.
D) $121,000.
E) $126,000.

Question

Quizplus · Accepted Answer

Since the raw materials used in manufacturing during the year amounted to $118,000, and assuming that there were no raw materials left over from the previous year, the raw materials purchased during the year should be equal to $118,000 plus any increase in raw materials inventory. Therefore, the best choice would be D) $121,000, which represents the sum of $118,000 and the $3,000 increase in raw materials inventory (assuming the company purchased all raw materials in cash).

The Following Information Relates to the Manufacturing Operations of the IMH