Answer (A) is correct . Prime costs are the combined costs of direct materials and direct labor. Beginning materials inventory $ ?67,000 ? Add:? purchases 163,000 Add:? transportation in 4,000 Less:? purchase returns (2,000) Materials available $232,000 Less:? ending materials inventory (62,000) Materials used in production $170,000,170+200=370
Answer (B) is incorrect because The amount of $168,000 equals purchases of materials adjusted for the change in inventories.
Answer (C) is incorrect because The amount of $363,000 incorporates the change in finished goods inventories.
Answer (D) is incorrect because The amount of $170,000 equals the materials used.
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Madtack Company’s prime cost for November is
