Using the Following Information, Compute the Cost of Direct Materials

question 96

Multiple Choice

Using the following information, compute the cost of direct materials used. $\begin{array}{ll}\text { Raw materials inventory, January 1 } & \$ 30,000 \\\text { Raw materials inventory, December 31 } & 60,000 \\\text { Work in process, January 1 } & 27,000 \\\text { Work in process, December 31 } & 18,000 \\\text { Finished goods, January 1 } & 60,000 \\\text { Finished goods, December 31 } & 48,000\\\text { Raw materials purchases } & 1,800,000 \\\text { Direct labor } & 890,000 \\\text { Factory utilities } & 225,000 \\\text { Indirect labor } & 75,000 \\\text { Factory depreciation } & 500,000 \\\text { Operating expenses } & 630,000\end{array}$

• A)$1,740,000.
• B)$1,830,000.
• C)$1,800,000.
• D)$1,770,000.

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Definitions:

Automated Assembly Lines

Production systems where equipment and machinery are used to automatically assemble products with minimal human intervention.

Installations

The process of setting up equipment or systems so they are ready for use or operation.

Support Products

Items or services sold to support or complement a company's main product line or services.

Installations

This term refers to the process of setting up equipment, machinery, or software so that it is ready for use.