Selected data concerning the past year's operations of the Burner Corporation are as follows: The cost of direct materials purchased is:
A) $397,500.
B) $403,500.
C) $367,500.
D) $405,000.

Question

Selected data concerning the past year's operations of the Burner Corporation are as follows:  The cost of direct materials purchased is:
A) $397,500. 
B) $403,500. 
C) $367,500. 
D) $405,000.

Quizplus · Accepted Answer

According to the data provided, the formula to calculate the cost of direct materials purchased is:
Beginning inventory of raw materials + Purchases of raw materials - Ending inventory of raw materials = Cost of direct materials purchased

$200,000 + $608,900 - $405,400 = $403,500

Therefore, the cost of direct materials purchased is $403,500, which corresponds to choice B.

Selected Data Concerning the Past Year's Operations of the Burner