TROBLEM 2. On June 30, 2006 a flash flood damaged the warchouse and factory of ABC Corporation completely destroying the work-in-progress inventory. There was no damage to either the raw materials or finished goods inventories. A physical verification taken after the flood revealed the following valuations. Raw Materials .62,000 Work-in-Progress Finished Goods 1,19,000 The inventory on Jan. 1, 2006 consicted of the following : 30,000 1,00,000 1,40,000 Raw Materials Work-in-Progress Finished Goods 2,70,000 A review of the books and records disclosed that the gross profit margin historically approximated 3,40,000. Raw material purchases 80,000 and manufacturing overhead has 25% of sales. The sales for the first six months of 2006 were 1,15,000. Direct labour costs for this period were were historicálly been 50% of direct labour. Compute the cost of work-in-progress inventory lost at June 30, 2006 by preparing a statement of cost and profit.
TROBLEM 2. On June 30, 2006 a flash flood damaged the warchouse and factory of ABC Corporation completely destroying the work-in-progress inventory. There was no damage to either the raw materials or finished goods inventories. A physical verification taken after the flood revealed the following valuations. Raw Materials .62,000 Work-in-Progress Finished Goods 1,19,000 The inventory on Jan. 1, 2006 consicted of the following : 30,000 1,00,000 1,40,000 Raw Materials Work-in-Progress Finished Goods 2,70,000 A review of the books and records disclosed that the gross profit margin historically approximated 3,40,000. Raw material purchases 80,000 and manufacturing overhead has 25% of sales. The sales for the first six months of 2006 were 1,15,000. Direct labour costs for this period were were historicálly been 50% of direct labour. Compute the cost of work-in-progress inventory lost at June 30, 2006 by preparing a statement of cost and profit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![TROBLEM 2. On June 30, 2006 a flash flood damaged the warchouse and factory of ABC
Corporation completely destroying the work-in-progress inventory. There was no damage to either the
raw materials or finished goods inventories. A physical verification taken after the flood revealed the
following valuations.
Raw Materials
.62,000
Work-in-Progress
Finished Goods
1,19,000
The inventory on Jan. 1, 2006 consicted of the following :
Raw Materials
Work-in-Progress
30,000
1,00,000
1,40,000
Finished Goods
2,70,000
25% of sales. The sales for the first six months of 2006 were
1,15,000. Direct labour costs for this period were
A review of the books and records disclosed that the gross profit margin historically approximated
3,40,000. Raw material purchases
80,000 and manufacturing overhead has
were
historicálly been 50% of direct labour.
Compute the cost of work-in-progress inventory lost at June 30, 2006 by preparing a statement of
cost and profit.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f4a2594-6ab0-4977-856c-5493cab38304%2F17fe4cbf-cdd5-45aa-ad1c-72e498ce06bc%2F4l4g5oj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:TROBLEM 2. On June 30, 2006 a flash flood damaged the warchouse and factory of ABC
Corporation completely destroying the work-in-progress inventory. There was no damage to either the
raw materials or finished goods inventories. A physical verification taken after the flood revealed the
following valuations.
Raw Materials
.62,000
Work-in-Progress
Finished Goods
1,19,000
The inventory on Jan. 1, 2006 consicted of the following :
Raw Materials
Work-in-Progress
30,000
1,00,000
1,40,000
Finished Goods
2,70,000
25% of sales. The sales for the first six months of 2006 were
1,15,000. Direct labour costs for this period were
A review of the books and records disclosed that the gross profit margin historically approximated
3,40,000. Raw material purchases
80,000 and manufacturing overhead has
were
historicálly been 50% of direct labour.
Compute the cost of work-in-progress inventory lost at June 30, 2006 by preparing a statement of
cost and profit.
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