The trial balance of Magic Shop Company showed inventories of P164,000. The inventories include some goods that have a production cost of P18,000. These goods have a manufacturing defect that will cost P6,000 to correct. The normal selling price for these goods would be P25,000, but after the remedial work they will be sold through an agent as refurbished goods at a discount of 20% on the normal selling price. The agent will receive a commission of 10% of the reduced selling price. In relation to the defective goods, the company will recognize a loss on inventory write down of? A. P4,000 B. P0 C. P1,000 D. P6,000
The trial balance of Magic Shop Company showed inventories of P164,000. The inventories include some goods that have a production cost of P18,000. These goods have a manufacturing defect that will cost P6,000 to correct. The normal selling price for these goods would be P25,000, but after the remedial work they will be sold through an agent as refurbished goods at a discount of 20% on the normal selling price. The agent will receive a commission of 10% of the reduced selling price. In relation to the defective goods, the company will recognize a loss on inventory write down of? A. P4,000 B. P0 C. P1,000 D. P6,000
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 18E
Related questions
Question
The
A. P4,000
B. P0
C. P1,000
D. P6,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
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
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning