Question

Magnus Industries has the following data: beginning raw materials inventory $75,000, materials purchased $40,000, ending raw materials inventory $60,000. Determine the cost of raw materials used.

Answer 1

The cost of raw materials used by Magnus Industries is $55,000, calculated by subtracting the ending inventory from the sum of the beginning inventory and materials purchased.

Step-by-step explanation:

To calculate the cost of raw materials used by Magnus Industries, we use the formula: Beginning Inventory + Purchases - Ending Inventory = Cost of Materials Used. In this case, Magnus Industries had a beginning raw materials inventory of $75,000, purchased additional materials worth $40,000, and had an ending inventory of $60,000. Therefore, the cost of raw materials used would be calculated as follows:

$75,000 (beginning inventory) + $40,000 (materials purchased) - $60,000 (ending inventory) = $55,000 (cost of raw materials used).The cost of raw materials used by Magnus Industries is $55,000, calculated by subtracting the ending inventory from the sum of the beginning inventory and materials purchased.