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:

Term Structure

The relationship between the interest rates or yields of bonds and their respective maturities.

Federal Government Bonds

Securities issued by a national government's treasury, often considered low-risk investments.

Risk Premium

The additional return expected by an investor for taking on a higher level of risk.

Nominal Interest Rate

The rate of interest before adjustment for inflation, representing the face value of interest payments.