Dasilva Company had only one job in process on May 1. The job had been charged with $1,400 of direct materials, $6,192 of direct labor, and $5,712 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $11.90 per direct labor-hour. During May, the following activity was recorded: Work in process inventory on May 30 contains $4,773 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.
-The balance in the raw materials inventory account on May 30 was:
A) $4,700
B) $43,300
C) $3,800
D) $39,500

Question

Dasilva Company had only one job in process on May 1. The job had been charged with $1,400 of direct materials, $6,192 of direct labor, and $5,712 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $11.90 per direct labor-hour. During May, the following activity was recorded:  Work in process inventory on May 30 contains $4,773 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.
-The balance in the raw materials inventory account on May 30 was:
A) $4,700 
B) $43,300 
C) $3,800 
D) $39,500

Quizplus · Accepted Answer

To find the answer, we need to use the formula:

Raw Materials Inventory = Direct Materials Used + Raw Materials Inventory on May 1 - Raw Materials Inventory on May 30

We know that the company had only one job in process on May 1, which had been charged with $1,400 of direct materials. We also know that raw materials consist solely of items that are classified as direct materials. So, the direct materials used during May can be calculated as:

Direct Materials Used = Direct Materials in Job + Direct Materials Purchased - Direct Materials in Ending Inventory

Direct Materials in Job = $1,400
Direct Materials Purchased = ?
Direct Materials in Ending Inventory = 0 (since all the raw materials were used in the job)

We can rearrange the formula to solve for Direct Materials Purchased:

Direct Materials Purchased = Direct Materials Used - Direct Materials in Job
Direct Materials Purchased = ($6,192 + $5,712) - $1,400
Direct Materials Purchased = $11,504

Now we can calculate the raw materials inventory on May 30:

Raw Materials Inventory = $11,504 + Raw Materials Inventory on May 1 - $0
Raw Materials Inventory on May 1 = $4,700 (given in the problem)
Raw Materials Inventory = $11,504 + $4,700 - $0
Raw Materials Inventory = $16,204

Finally, we need to subtract the value of raw materials on May 30:

Raw Materials Inventory = $16,204 - $11,404
Raw Materials Inventory = $4,700

Therefore, the balance in the raw materials inventory account on May 30 was $4,700.

Dasilva Company Had Only One Job in Process on May