Tyare Corporation had the following inventory balances at the beginning and end

Question

Tyare Corporation had the following inventory balances at the beginning and end of May: May 30 $30,000$39,000 $79,500 75,000 $18,000 $17,193 May 1 Raw materials Finished Goods Work in Process During May, $63,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 390 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,500 of direct materials cost. The Corporation incurred $43,350 of actual manufacturing overhead cost during the month and applied $42,300 in manufacturing overhead cost. The raw materials purchased during May totaled

Explanation / Answer

D. $72,000

Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials – Ending raw materials inventory

$63,000 = $30,000 + Purchases of raw materials – $39,000

Purchases of raw materials = $63,000 – $30,000 + $39,000 = $72,000

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