Metal on hand January 1 costs $10,800, purchases for the year are $42,600 and metal remaining on December 31 costs $1,800. What is the cost of direct materials added to production?

1. The direct materials cost budget starts with materials on hand at the beginning of the year, $10,800. 2. Purchases during the year of $42,600 are added. 3. Cost of direct materials available for use is $10,800 plus $42,600, which is $53,400. 4. Materials still on hand at December 31 cost $1,800 and were not used. 5. Cost of direct materials added to production is $53,400 minus $1,800, which is $51,600. 6. $53,400 is the amount available for use rather than the amount consumed. 7. $42,600 is purchases alone, which ignores both the opening and the closing stock. _Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 7.6 Sales Budget_