Fairfield Company’s raw materials inventory transactions for the most recent month are summarized here: Beginning raw materials $ 20,000 Purchases of raw materials 90,000 Raw materials issued Materials requisition 1445 25,000 For Job 101 Materials requisition 1446 35,000 For Job 102 Materials requisition 1447 30,000 Used on multiple jobs 1. How much of the raw materials cost would be added to the Work in Process Inventory account during the period? 2. How much of the raw materials costs would be added to the Manufacturing Overhead account? 3. Compute the ending balance in the Raw Materials Inventory account.

1. $60,000

2. $30,000

3. $20,000

Explanation:

1. How much of the raw materials cost would be added to the Work in Process Inventory account during the period?

The amount to add add to the Work in Process Inventory account during the period is the direct material used calculated as follows:

Direct raw materials used =  Materials requisition 1445 For Job 101 + Materials requisition 1446 For Job 102 = $25,000 + $35,000 = $60,000

2. How much of the raw materials costs would be added to the Manufacturing Overhead account?

Manufacturing overhead refers to all indirect costs that are incurred during the production process. Therefore, the raw materials costs that would be added to the Manufacturing Overhead account is the indirect materials used on multiple jobs.

Therefore, we have:

Amount to add to the Manufacturing Overhead account = Indirect materials used = $30,000

3. Compute the ending balance in the Raw Materials Inventory account.

Ending raw materials balance = Beginning raw materials + Purchases of raw materials - Direct raw materials used - Indirect materials used = $20,000 + $90,000 - $60,00 - $30,000 = $20,000

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