Which of the following formulas correctly calculates the direct materials used in production during a period?

• A. Purchases + Ending Raw Materials Inventory - Beginning Raw Materials Inventory
• B. Cost of Goods Sold + Ending Inventory - Beginning Inventory
• C. Beginning Raw Materials Inventory + Purchases - Ending Raw Materials Inventory
• D. Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of 'Direct Materials Used in Production'. This refers to the raw materials that are consumed during the production process within a specific period.
2. Step 2: Recall the formula for calculating direct materials used in production. The correct formula is: Beginning Raw Materials Inventory + Purchases - Ending Raw Materials Inventory.
3. Step 3: Break down the formula: (a) Beginning Raw Materials Inventory represents the amount of raw materials available at the start of the period. (b) Purchases represent the raw materials bought during the period. (c) Ending Raw Materials Inventory represents the amount of raw materials left at the end of the period.
4. Step 4: Apply the formula step-by-step: (a) Add the Beginning Raw Materials Inventory to Purchases to determine the total raw materials available during the period. (b) Subtract the Ending Raw Materials Inventory to calculate the raw materials actually used in production.
5. Step 5: Compare the given formulas in the problem to identify the correct one. The correct formula matches the explanation above: Beginning Raw Materials Inventory + Purchases - Ending Raw Materials Inventory.