Question

Administrative Expenses $ 686,200 Beginning Finished Goods $ 108,620 Beginning Raw Materials $ 427,150 Beginning WIP $ 20,625 Depreciation on Factory Equip $ 202,035 Direct Labor $ 756,908 Ending Finished Goods $ 93,612 Ending Raw Materials $ 501,302 Ending WIP $ 27,941 Factory Utilities $ 312,052 Indirect Materials Used from Raw Materials $ 87,712 Insurance (70% for factory 30% for admin) $ 210,855 Marketing Expenses $ 442,807 Raw Materials Purchases $ 2,422,920 Repair and Maintenance on Factory Equip $ 129,246 Sales $ 6,420,456 Sales Supervision $ 294,485 Direct Materials Used is:
1) 2,348,768
2) 2,261,056
3) 2,422,920
4) 2,850,070

Answer 1

Answer:

1) 2,348,768

Explanation:

The formula to compute the direct material used is shown below:

= Opening balance of raw material + purchase - ending balance of raw material

= $427,150 + $2,422,920 - $501,302

= $2,348,768

We simply added the purchase and deduct the ending balance to the opening balance of raw material so that the accurate amount can come