ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Direct material for production= 410, 000 pounds.

Detailed explanation-2: -Subtract the cost of goods sold Finally, take the total costs of all finished goods and products sold over the set period and subtract that number from the sum of starting raw materials and raw materials purchased to calculate your raw materials inventory.

Detailed explanation-3: -Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated.

Detailed explanation-4: -The cost of raw materials purchased can therefore be calculated as follows: Raw Materials Purchased = (Ending Inventory – Beginning Inventory) + Cost of Goods Sold. A direct material purchases budget determines the quantity of material purchased within a production period.

Detailed explanation-5: -What do we mean when we say raw material cost? The cost of raw material refers to the amount necessary to buy the resources used by businesses to produce a product or even service. In many cases, the cost of raw materials guides businesses in establishing the final price of the item that they intend to sell.