Tierney Construction Inc recently lost a portion of its fina

Tierney Construction, Inc. recently lost a portion of its financial records in an office theft. The following accounting information remained in the office files: Cost of Goods Sold Work-in-Process Inventory, January 1, 2018 Work-in-Process Inventory, December 31, 2018 Selling and Administrative Expense Net Income Factory overhead Direct materials inventory, January 1, 2018 Direct materials inventory, December 31, 2018 Cost of goods manufactured Finished goods inventory, January 1, 2018 $85,600 $19,600 $15,700 $17,000 32,200 $20,400 $28,200 $14,400 $106,300 $33,300 Direct labor cost incurred during the period amounted to 2.8 times the factory overhead. The CFO of Tierhey Construction, Inc. has asked you to recalculate the following accounts and to report to him by the end of tomorrow What should be the amount of direct materials purchased? $102,400 $11,080 $24,880 $139,600 A. C.

Solution

Current manufacturing costs = 106300-19600+15700= 102400 Direct materials used = 102400-(20400*2.8)-20400= 24880 Amount of direct materials purchased = 24880+14400-28200= 11080 Option B is correct