Question

Based on physical inventory at year-end, Cherry Company determined the chocolate inventory on a FIFO basis at P2,600,000 with replacement cost of P2,500,000. Cherry Company estimated that after further processing costs of P1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. What amount should be reported as chocolate inventory at year-end? P2,400,000 P2,800,000 P2,600,000 P2,200,000

Name: based on physical inventory at year end cherry company determined the chocolate inventory on a fifo basis at p2600000 with replacement cost of p2500ooo cherry company estimated that after fu 33382
Uploaded: 2022-03-02T17:23:48-08:00
Duration: 4 min 10 s
Channel: Manasvee Singh
Description: based on physical inventory at year end cherry company determined the chocolate inventory on a fifo basis at p2600000 with replacement cost of p2500ooo cherry company estimated that after fu 33382

          Based on physical inventory at year-end, Cherry Company determined the chocolate inventory on a FIFO basis at P2,600,000 with replacement cost of P2,500,000. Cherry Company estimated that after further processing costs of P1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. What amount should be reported as chocolate inventory at year-end?
P2,400,000
P2,800,000
P2,600,000
P2,200,000

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Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Manasvee Singh

03/02/2022

Step 1

Step 1: Calculate the Replacement Cost (RC): Given Replacement Cost (RC) = P2,500,000 Show more…

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Based on physical inventory at year-end, Cherry Company determined the chocolate inventory on a FIFO basis at P2,600,000 with replacement cost of P2,500,000. Cherry Company estimated that after further processing costs of P1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. What amount should be reported as chocolate inventory at year-end? P2,400,000 P2,800,000 P2,600,000 P2,200,000