Mimi Company has been having difficulty obtaining necessary raw materials for its manufacturing process. The company, therefore, signed a long-term noncancelable purchase commitment with its largest supplier of this raw material on Jun3 30, 2020, at an agreed price of P800,000. On December 31, 2020, the raw material had declined in price to P720,000 1.Assuming that on March 31, 2021, Mimi Company purchases the raw materials. During this time, the market price of the raw materials is P810,000? P780,000? P690,000?
Mimi Company has been having difficulty obtaining necessary raw materials for its manufacturing process. The company, therefore, signed a long-term noncancelable purchase commitment with its largest supplier of this raw material on Jun3 30, 2020, at an agreed price of P800,000. On December 31, 2020, the raw material had declined in price to P720,000 1.Assuming that on March 31, 2021, Mimi Company purchases the raw materials. During this time, the market price of the raw materials is P810,000? P780,000? P690,000?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mimi Company has been having difficulty obtaining necessary raw materials for its manufacturing
process. The company, therefore, signed a long-term noncancelable purchase commitment with its
largest supplier of this raw material on Jun3 30, 2020, at an agreed price of P800,000. On December
31, 2020, the raw material had declined in price to P720,000
1.Assuming that on March 31, 2021, Mimi Company purchases the raw materials. During this
time, the market price of the raw materials is P810,000? P780,000? P690,000?
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