Selected data concerning the past fiscal year's operations (000's omitted) of the Stanley Manufacturing Company are presented below: Assuming Stanley does not use indirect materials, the cost of materials purchased during the year amounted to:
A)$455.
B)$450.
C)$365.
D)$360.

Question

Selected data concerning the past fiscal year's operations (000's omitted) of the Stanley Manufacturing Company are presented below:  Assuming Stanley does not use indirect materials, the cost of materials purchased during the year amounted to:
A)$455. 
B)$450. 
C)$365. 
D)$360.

Quizplus · Accepted Answer

Materials purchased added to Materials inventory at the beginning of the month results in the materials available for use. During the year, the materials are used or they remain in the Materials inventory at the end of the year, so the total of materials used and ending Materials inventory is also the total of the amount of materials available. Therefore, the equation can be rearranged to compute the materials purchases as follows:
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Selected Data Concerning the Past Fiscal Year's Operations (000's Omitted)