Information from the records of Chrome Ponies Enterprises fo

Information from the records of Chrome Ponies Enterprises for June 2014 is as follows:

Sales $41,000

Direct labor 10,000

Selling and administrative expenses 7,000

Direct materials purchases 5,000

Factory overhead 11,500

Inventories

June 1, 2014    June 30, 2014

Direct materials                      $1,200           $1,400

Work in process                      2,500               2,800

Finished goods                        2,300               1,900

Refer to Figure 2-15. What was the cost of materials used in production?

Solution

Cost of materials used in production = 4,800

Cost of materials used in production = Opening balance of direct materials + purchase of materials - ending balance of materias

= 1200 + 5000 - 1400

= 4800