The following partially completed T-accounts summarize transactions for Faas Company during the year:
-The direct materials cost was:
A) $3,600
B) $6,600
C) $5,000
D) $8,000

Question

The following partially completed T-accounts summarize transactions for Faas Company during the year: 
-The direct materials cost was:
A) $3,600 
B) $6,600 
C) $5,000 
D) $8,000

Quizplus · Accepted Answer

Looking at the T-account for "Direct materials inventory," we can see that the beginning balance was $5,000 and $8,000 worth of materials were purchased during the year. Therefore, the total cost of direct materials available for use was $13,000. If we subtract the ending balance of $3,600 from this amount, we get a total direct materials cost of $9,400. However, we need to remember that the ending balance in the direct materials inventory account includes both raw materials and work in progress. Therefore, we need to subtract the cost of work in progress to get the cost of raw materials used in production. Looking at the T-account for "Work in progress," we can see that the beginning balance was $0, and $5,000 worth of direct materials were requisitioned for use in production during the year. Therefore, the cost of raw materials used in production is $9,400 - $5,000 = $4,400.

The Following Partially Completed T-Accounts Summarize Transactions for Faas Company