The following partially completed T-accounts are for Stanford Corporation: The cost of direct materials used is:
A) $14,000
B) $15,000
C) $18,000
D) $24,000

Question

The following partially completed T-accounts are for Stanford Corporation:         The cost of direct materials used is:
A) $14,000 
B) $15,000 
C) $18,000 
D) $24,000

Quizplus · Accepted Answer

The direct materials are debited to the Raw Materials Inventory account and credited to Accounts Payable. The increase in raw materials inventory from $12,000 to $16,000 indicates an increase in the cost of direct materials purchased, which can be calculated by subtracting the beginning balance from the ending balance:

$16,000 - $12,000 = $4,000 increase in raw materials inventory
Since raw materials purchased equals the increase in raw materials inventory plus the cost of direct materials used, we can solve for the cost of direct materials used:

Raw materials purchased = $4,000 + Direct materials used
$18,000 = $4,000 + Direct materials used
Direct materials used = $14,000

The Following Partially Completed T-Accounts Are for Stanford Corporation