Fire loss, computing inventory costs. A distraught employee, Fang W. Arson, put a torch to a manufacturing plant on a blustery February 26. 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 January 1, 195 to February 26, 19_5:

Direct materials purchased $160,000 Work in process 1/1/19_5 $34,000 Direct materials, 1'1/19_5 $16,000 Finished goods, 1/1/1 9_5 $30,000 Manufacturing overhead 40% of conversion costs Sales $500,000 Direct manufacturing labor $180,000 Prime costs $294,000 Gross margin percentage based on sales 20%

Cost of goods available for sale $450,000 The loss was fully co ered by insurance. The insurance company wants to know the historical cost of the inventories as a basis for negotiating a settlement, although the settlement is actually to be based on rep cement cost, ni torical cost.

A 20,000 3,000 1,700 1,800 1,500 B 5,300 11,300 C 0

800 0

3,000 4,000 4,000 8,000 12,000 3,000 7,000 5,000 D 9,000 7,000 32,000 31,800 2,000 1,400 Required Calculate the cost of 1. Finished goods inventory, 2/26/195 2. Work in process inventory, 2/26 19_5 3. Direct materials inventory, 2/26/ 19_5