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4. What is the cost of goods in process inventory destroyed by fire? a. 3,500,000 b. 3,800,000 c. 2,500,000 d. 1,500,000

4. What is the cost of goods in process inventory destroyed by fire? a. 3,500,000 b. 3,800,000 c. 2,500,000 d. 1,500,000

Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter2: The Purchasing Process
Section: Chapter Questions
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4. What is the cost of goods in process inventory destroyed by fire? a. 3,500,000 b. 3,800,000 c. 2,500,000 d. 1,500,000
Transcribed Image Text:4. What is the cost of goods in process inventory destroyed by fire? a. 3,500,000 b. 3,800,000 c. 2,500,000 d. 1,500,000
On December 31, 2019, Frenzy Company had a fire which completely destroyed the goods in process inventory. A physical inventory was taken after the fire. December 31 January 1 Finished goods Goods in process Raw materials 4,500,000 6,000,000 4,300,000 1,700,000 500,000 2,000,000 400,000 Factory supplies During the year, the entity reported sales P20,000,000, purchases P3,800,000, freight P200,000, direct labor P5,000,000 and manufacturing overhead at 60% of direct labor. The average gross profit rate is 30% on sales.
Transcribed Image Text:On December 31, 2019, Frenzy Company had a fire which completely destroyed the goods in process inventory. A physical inventory was taken after the fire. December 31 January 1 Finished goods Goods in process Raw materials 4,500,000 6,000,000 4,300,000 1,700,000 500,000 2,000,000 400,000 Factory supplies During the year, the entity reported sales P20,000,000, purchases P3,800,000, freight P200,000, direct labor P5,000,000 and manufacturing overhead at 60% of direct labor. The average gross profit rate is 30% on sales.
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