$15,000 of raw materials were purchased during August. Additionally, the inventory accounts had the following beginning and ending balances: Inventories Balance August 1 Balance August 31 Raw materials $3,300 $2,800 Work in process $10,000 $15,000 Finished goods $40,000 $25,000 Question: What is the cost of raw materials used in production during August?

Raw materials used in production $ 15,500

Explanation:

The raw materials used in production is calculated by the following formula:

Opening balance - Raw materials + Raw materials purchases - Closing balance - raw materials

$ 3,300 + $ 15,000 - $ 2,800 = $ 15,500

The work in process opening and closing balances are used to determine the cost of goods manufactured.

The finished goods opening and closing balances are used to determine the cost of goods sold.

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