Fire loss, computing stock costs. (30-40 minutes) 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 1999 to 26 February 1999:  l01

REQUIRED Calculate the cost of 1. finished goods stock, 26 February 1999 2. work-in-progress stock, 26 February 1999 3. direct materials stock, 26 February 1999

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Direct materials purchased Work in progress, 1 January 1999 Direct materials, 1 January 1999 Finished goods, 1 January 1999 Indirect manufacturing costs Revenues Direct manufacturing labour Prime costs Gross margin percentage based on sales Cost of goods available for sale EUR 3.2 million EUR 680,000 EUR 320,000 EUR 600,000 40% of conversion costs EUR 10 million EUR 3.6 million EUR 5.88 million 20% EUR 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.