PROBLEM 13 (CPALE Adapted) Juan Gabriel Company manufactures bath towels. The production comprises 70% of...
50.1K
Verified Solution
Link Copied!
Question
Accounting
PROBLEM 13 (CPALE Adapted)
Juan Gabriel Company manufactures bath towels. The production comprises 70% of Class A, and 30% of Class B. Class A sells for P300 per dozen while Class B sells for P200 a dozen. During the current year, 50,000 dozens were produced at an average cost of P175 a dozen. The inventory at the end of the current year is as follows:
3,000 dozens Class A at P175 P 525,000
4,500 dozens Class B at P175 787,500
Total Inventory P 1,312,500
Using the relative sales value method, which management considers as a more equitable basis for cost distribution, compute:
1. the inventory's (cost) of the inventory? Hint: First, find the ratio using the relative sales value method, then allocate this to the total production cost of P8,750,000 [50,000 dozens at P175]. After that, divide it into the number of units of production per class to get the unit cost.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
