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Materials inventory was $16,000 on June 1, purchases during June were $59,000 and the June 30 materials balance was $18,000. What amount moved into production?
A$75,000
B$41,000
C$57,000
D$34,000
Answer & Solution
Correct answer: C. $57,000
1. Inventory transferred out equals beginning balance plus additions during the month minus the ending balance.
2. Beginning materials are $16,000 and purchases add $59,000, so cost of materials available to use is $75,000.
3. Materials still in inventory on June 30 are $18,000, and those were not used.
4. Materials used and transferred to Work in Process are $75,000 minus $18,000, which is $57,000.
5. $75,000 is only the amount available to use, before the ending balance is removed.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 1.3.1 Financial Reporting for a Manufacturer_
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