COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Nic Company consumed P450, 000 worth of direct materials during May 2020. At the end of the month, the direct materials inventory was P25, 000 lower than the May 1 inventory. How much is the direct materials purchased during May 2020?
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P475, 000
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375, 000
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400, 000
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425, 000
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Explanation:
Detailed explanation-1: -Direct materials. Add the total cost of materials purchases in the period to the cost of beginning inventory, and subtract the cost of ending inventory. The result is the cost of direct materials incurred during the period.
Detailed explanation-2: -Understanding the Direct Materials Cost Formula The following formula can calculate the cost: Beginning Materials + Costs of Materials Purchased-Ending Materials = Direct Material Used.
Detailed explanation-3: -The cost of goods available for sale equals the beginning value of inventory plus the cost of goods purchased. The cost of goods sold equals the cost of goods available for sale less the ending value of inventory.
There is 1 question to complete.