Summit Company Has Provided the Following Inventory Balances and Manufacturing

question 20

Multiple Choice

Summit Company has provided the following inventory balances and manufacturing cost data for the month of January:
$\begin{array}{|l|r|r|}\hline \text { Inventories: } & \text { January 1 } & \text { January 31 } \\\hline \text { Direct materials } & \$ 30,000 & \$ 40,000 \\\hline \text { Work in process } & 15,000 & 20,000 \\\hline \text { Finished goods } & 65,000 & 50,000 \\\hline\end{array}$
$\begin{array} { | l | r | } \hline & \text { Month of January } \\\hline \text { Cost of goods manufactured } & \$ 515,000 \\\hline \text { Manufacturing overhead applied } & 150,000 \\\hline \text { Direct materials used } & 190,000 \\\hline \text { Actual manufacturing overhead } & 144,000 \\\hline\end{array}$ Under Summit's job-order costing system, any over- or underapplied overhead is closed out to the Cost of Goods Sold account at the end of the calendar year (that is, December 31) .

-What was the total amount of direct material purchases during January?

• A) $180,000.
• B) $190,000.
• C) $195,000.
• D) $200,000.

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