Question

Nestlé reports beginning raw materials inventory of 3,815 and ending raw materials inventory of 3,499 (both numbers in millions of Swiss francs). If Nestlé purchased 13,860 (in millions of Swiss francs) of raw materials during the year, what is the amount of raw materials it used during the year?

Short answer

During the year, the business entity has used the raw material of14,176 million (Swiss francs).

Step-by-step solution

Definition of Raw Material Inventory

The raw material is part of the inventory that the business entity has not processed. It accounts for the current assets of the business.

Calculation of raw material used during the year

Particular	Amount (in millions of Swiss francs)
Beginning raw material inventory	3,815
Add: Raw material purchased	13,860
Less: Ending raw material inventory	(3,499)
Raw material used	14,176