A distraught employee, Guy Pirault-Manne, put a torch to a manufacturing plant on a blustery day, 26

Question:

A distraught employee, Guy Pirault-Manne, put a torch to a manufacturing plant on a blustery day, 26 February. The resulting blaze completely destroyed the plant and its contents. Fortunately, certain accounting records were kept in another building. They revealed the following for the period from 1 January 2008 to 26 February 2008:

Direct materials purchased......................................... €3.2 million

Work in progress, 1 January 2008................................ €680 000

Direct materials, 1 January 2008................................. €320 000

Finished goods, 1 January 2008.................................. €600 000

Indirect manufacturing costs..................................... 40% of conversion costs

Revenues ............................................................ €10 million

Direct manufacturing labor....................................... €3.6 million

Prime costs............................................................ €5.88 million

Gross margin percentage based on sales......................... 20%

Cost of goods available for sale................................... €9 million

The loss was fully covered by insurance. The insurance company wants to know the historical cost of the stocks as one factor considered when negotiating a settlement.

Required

Calculate the cost of:

1. Finished goods stock, 26 February 2008

2. Work-in-progress stock, 26 February 2008

3. Direct materials stock, 26 February 2008.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...