Using the following information, compute the direct materials used.

Raw materials inventory, January 1 $20,000
Raw materials inventory, December 31 40,000
Work in process, January 1 18,000
Work in process, December 31 12,000
Finished goods, January 1 40,000
Finished goods, December 31 32,000
Raw materials purchases 1,700,000
Direct labor 760,000
Factory utilities 150,000
Indirect labor 50,000
Factory depreciation 400,000
Operating expenses 420,000

a. $1,460,000.
b. $1,420,000.
c. $1,400,000.
d. $1,380,000.

$1,680,000

Explanation:

The computation of the direct material used is shown below:

Cost of the direct materials used equal to

= Beginning Raw materials inventory balance + raw materials purchases - ending Raw materials inventory balance

= $20,000 + $1,700,000 - $40,000

= $1,680,000

In order to find out the cost of direct material used we simply added the opening raw material balance and deduct the ending raw material balance to the purchase of the raw material so that the correct amount could arrive

Note: This is the answer but the same is not provided in the given options

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disadvantages of purchasing a vehicle: large down payment and vehicle depreciation

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