On May 31, 2019, a fire completely destroyed the work-in-process inventory of Adler Paints. Physical inventory figures were published as follows: As of January 1, 2019 As of May 31, 2019 Raw Materials P15,000 P 30,000 Work-in-process P50,000 - Finished Goods P70,000 P 60,000 Sales for the first five months of 2019 were P150,000. Raw materials purchased were P50,000. Freight on purchased were P50,000. Freight on purchases was P5,000. Direct labor for the five months was P40,000. To determine the value of the lost inventory, the insurance adjusters have agreed to use an average gross profit rate of 32.5%. Assume that manufacturing overhead was 45% of direct labor cost. A. Compute the value of the goods manufactured and completed as of May 31, 2019. B. Compute the raw materials used during the first five months of 2019. C. Compute the total value of goods put in process during the five-month period. D. Compute the value of the destroyed work-in-process inventory as determined by the insurance adjusters.
On May 31, 2019, a fire completely destroyed the work-in-process inventory of Adler Paints. Physical inventory figures were published as follows:
As of January 1, 2019 As of May 31, 2019
Raw Materials P15,000 P 30,000
Work-in-process P50,000 -
Finished Goods P70,000 P 60,000
Sales for the first five months of 2019 were P150,000. Raw materials purchased were P50,000. Freight on purchased were P50,000. Freight on purchases was P5,000. Direct labor for the five months was P40,000. To determine the value of the lost inventory, the insurance adjusters have agreed to use an average gross profit rate of 32.5%. Assume that manufacturing overhead was 45% of direct labor cost.
A. Compute the value of the goods manufactured and completed as of May 31, 2019.
B. Compute the raw materials used during the first five months of 2019.
C. Compute the total value of goods put in process during the five-month period.
D. Compute the value of the destroyed work-in-process inventory as determined by the insurance adjusters.
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