Raw Materials Consumed Formula

Steps:

• Add opening inventory to purchases: $50,000 +$80,000 = $130,000.
• Subtract closing inventory from the total: $130,000 -$60,000 = $70,000.
• This gives the raw materials used in production.

Why A is correct:

• Matches the standard formula for cost of raw materials consumed: Opening inventory + Purchases - Closing inventory.

Why the others are wrong:

• B: Overstates by ignoring the inventory increase ($60,000 closing >$50,000 opening).
• C: Equals purchases only, ignores inventory changes.
• D: Adds closing inventory instead of subtracting, inflating the total.

Final answer: A