M28 Recording the Purchase and Issue of Raw Materials LO 22

M2-8 Recording the Purchase and Issue of Raw Materials [LO 2-2, 2-4]

Fairfield Company’s raw materials inventory transactions for the most recent month are summarized here:

1. How much of the raw materials cost would be added to the Work in Process Inventory account during the period?

2. How much of the raw materials costs would be added to the Manufacturing Overhead account?

3. Compute the ending balance in the Raw Materials Inventory account.
Ending Balance ???

Beginning raw materials	$	11,500
Purchases of raw materials		114,000
Raw materials issued
Materials requisition 1445		46,500	For Job 101
Materials requisition 1446		31,500	For Job 102
Materials requisition 1447		14,500	Used on multiple jobs

Solution

Particulars Amount Amount Materials: Opening balance        11,500 Add: purchases     1,14,000 Materials available     1,25,500 Less: Total materials used        92,500 Ending inventory            33,000