Velasquez Company has a cycle time of 4 days, uses Raw and In Process account (RIP) and expenses all conversion costs to Cost of Goods Sold. At the end of each month, all inventories are counted; their conversion components are estimated and inventory account balances are adjusted accordingly. Raw materials is backflushed from RIP to Finished Goods. The following information is for the month of October: RIP beginning, including P10,000 of conversion cost, P35,000; FG beginning, including P6,800 of conversion cost; P30,000; Raw materials purchased on account, P225,000; RIP end, including P13,700 of conversion cost, P23,500; FG end, including P11,100 of conversion cost, P14,800. Direct labor P175,000; Factory overhead P220,000.
Velasquez Company has a cycle time of 4 days, uses Raw and In Process account (RIP) and expenses all conversion costs to Cost of Goods Sold. At the end of each month, all inventories are counted; their conversion components are estimated and inventory account balances are adjusted accordingly. Raw materials is backflushed from RIP to Finished Goods. The following information is for the month of October: RIP beginning, including P10,000 of conversion cost, P35,000; FG beginning, including P6,800 of conversion cost; P30,000; Raw materials purchased on account, P225,000; RIP end, including P13,700 of conversion cost, P23,500; FG end, including P11,100 of conversion cost, P14,800. Direct labor P175,000; Factory overhead P220,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Velasquez Company has a cycle time of 4 days, uses Raw and In Process account (RIP) and expenses all conversion costs to Cost of Goods Sold. At the end of each month, all inventories are counted; their conversion components are estimated and inventory account balances are adjusted accordingly. Raw materials is backflushed from RIP to Finished Goods. The following information is for the month of October: RIP beginning, including P10,000 of conversion cost, P35,000; FG beginning, including P6,800 of conversion cost; P30,000; Raw materials purchased on account, P225,000; RIP end, including P13,700 of conversion cost, P23,500; FG end, including P11,100 of conversion cost, P14,800. Direct labor P175,000; Factory overhead P220,000. What is the amount of conversion costs in the cost of goods sold account?
a.P646,700
b.P395,000
c.P387,000
d.P259,700
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education