On September 30, 2019, a flash flood damaged the warehouse and factory Of Waltermart, Inc. completely destroying its work in process inventory. There was no damage to either raw materials or finished goods since these were stored in an elevated section of the warehouse. A physical inventory taken immediately after the flood subsided showed the following: Raw materials — P740,000; Finished goods — P1,310,00. Inventories at January 1, 2019 consisted of the following: Raw Materials — P400,000; Work in Process — P1,100,000; Finished Goods - P1,500,000. The company's profit margin for the last several years is 25%. Sales for the first nine months of 2019 were P4,000,000. Raw materials purchases were P1,280,000. Direct labor cost for the period amounted to P960,000. Manufacturing overhead is applied at 50% of direct labor cost. What is the value of the work in process lost from flood at September 30, 2019? a. P580,000 b. P640,000 c. P670,000 d. P720,000 WITH EXPLANATION PLS!
On September 30, 2019, a flash flood damaged the warehouse and factory Of Waltermart, Inc. completely destroying its work in process inventory. There was no damage to either raw materials or finished goods since these were stored in an elevated section of the warehouse. A physical inventory taken immediately after the flood subsided showed the following: Raw materials — P740,000; Finished goods — P1,310,00. Inventories at January 1, 2019 consisted of the following: Raw Materials — P400,000; Work in Process — P1,100,000; Finished Goods - P1,500,000. The company's profit margin for the last several years is 25%. Sales for the first nine months of 2019 were P4,000,000. Raw materials purchases were P1,280,000. Direct labor cost for the period amounted to P960,000. Manufacturing overhead is applied at 50% of direct labor cost. What is the value of the work in process lost from flood at September 30, 2019? a. P580,000 b. P640,000 c. P670,000 d. P720,000 WITH EXPLANATION PLS!
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On September 30, 2019, a flash flood damaged the warehouse and factory Of Waltermart, Inc. completely destroying its work in process inventory. There was no damage to either raw materials or finished goods since these were stored in an elevated section of the warehouse.
A physical inventory taken immediately after the flood subsided showed the following: Raw materials — P740,000; Finished goods — P1,310,00.
Inventories at January 1, 2019 consisted of the following: Raw Materials — P400,000; Work in Process — P1,100,000; Finished Goods - P1,500,000.
The company's profit margin for the last several years is 25%. Sales for the first nine months of 2019 were P4,000,000. Raw materials purchases were P1,280,000. Direct labor cost for the period amounted to P960,000. Manufacturing overhead is applied at 50% of direct labor cost.
What is the value of the work in process lost from flood at September 30, 2019?
a. P580,000
b. P640,000
c. P670,000
d. P720,000
WITH EXPLANATION PLS!
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