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Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. a. $130,000 b. $70,000 c. $74,000 d. $102,000

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marvineetesh3

The cost of direct material used during the period would be $1,24,000.

What is inventory?

Inventory is an asset because the company invents money in that, it is the stock used in a particular business it starts with an opening balance of inventory and ends with its closing balance.

The cost of goods sold is the cost of the product which is sold during the year.

The formula for computing cost of goods sold(COGS):

[tex]\text{COGS} = \rm{OS+ Purchases- CS}[/tex]

OS= Opening Stock,

CS= Closing Stock.

Computation of cost of direct material:

Given that,

Opening stock of raw material = $27,000,

Closing  stock of raw material = $28,000,

Purchases =  $72,000  ($1,00,000-$28,000)

Putting the given values in the above formula, we get:

[tex]\text{COGS} = \rm{OS+ Purchases- CS}\\\\\text{COGS}=\$ 27,000+(\$1,00,000-\$28,000)+\$25,000\\\\\text{COGS}= \$1,27,000.[/tex]

Hence, the cost of direct materials used during the period would be $1,27,000.

Learn more about inventory, refer:

https://brainly.com/question/14184995

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