At the beginning of current year, Cavalier Company reported inventory of P1,000,000 at retail and P560,000 at cost. During the current year, the entity registered the following purchases: Cost Retail price Original markup The net sales totaled P5,400,000. The following reductions were made in the retail price: To meet price competition To dispose of overstock Miscellaneous reductions 4,000,000 6,200,000 2,200,000 50,000 30,000 120,000 During the current year, the selling price of a certain inventory increased from P200 to P300. This additional markup applied to 5,000 items but was later canceled on the remaining 1,000 items. a. 2,000,000 b. 2,400,000 c. 1,240,000 d. 1,200,000 What is the ending inventory using the average cost approach in applying the retail method?
At the beginning of current year, Cavalier Company reported inventory of P1,000,000 at retail and P560,000 at cost. During the current year, the entity registered the following purchases: Cost Retail price Original markup The net sales totaled P5,400,000. The following reductions were made in the retail price: To meet price competition To dispose of overstock Miscellaneous reductions 4,000,000 6,200,000 2,200,000 50,000 30,000 120,000 During the current year, the selling price of a certain inventory increased from P200 to P300. This additional markup applied to 5,000 items but was later canceled on the remaining 1,000 items. a. 2,000,000 b. 2,400,000 c. 1,240,000 d. 1,200,000 What is the ending inventory using the average cost approach in applying the retail method?
Chapter1: Financial Statements And Business Decisions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:At the beginning of current year, Cavalier Company reported
inventory of P1,000,000 at retail and P560,000 at cost
During the current year, the entity registered the following
purchases:
Cost
Retail price
Original markup
The net sales totaled P5,400,000. The following reductions
were made in the retail price:
To meet price competition
To dispose of overstock
Miscellaneous reductions
4,000,000
6,200,000
2,200,000
50,000
30,000
120,000
During the current year, the selling price of a certain
inventory increased from P200 to P300.
This additional markup applied to 5,000 items but was later
canceled on the remaining 1,000 items.
a. 2,000,000
b. 2,400,000
c. 1,240,000
d. 1,200,000
What is the ending inventory using the average cost
approach in applying the retail method?
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