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42 4. The Sana All Merchandising Company is a leading distributor of tupperwares. The company uses the first-in, first-out method of calculating the cost of
42 4. The Sana All Merchandising Company is a leading distributor of tupperwares. The company uses the first-in, first-out method of calculating the cost of goods sold. The following information concerning two of the company's products is taken from the month of May: RED BLUE No. of units Unit cost No. of units Unit cost May 1, Beg. inventory 10,000 P60 6,000 P 40 Purchases: May 15 14,000 65 9,000 May 25 6,000 75 Sales for the month 20,000 (at P80) 10,000 (at P44) On May 31, Sana All's suppliers reduced their price from the last purchase price by the following percentages: Red - 25% Blue - 20% Accordingly, the company agreed to reduce selling prices by 15% on all items beginning next month. Sana All Merchandising Company's selling costs are calculated at 10% of selling price. Both products have a normal profit of 30% on sales prices (after selling costs). Total cost of Red as of May 31 is a. P710,000 C.P600,000 b. P653,300 d. P612,000 5. Refer to #4. Total cost of Blue as of May 31 is a. P210,000 c. P200,000 b. P206,000 d. P168,300 6. Refer to #4. The inventory at May 31 should be valued at a. P768,300 c. P920,000 b. P780,300 d. P890,000 7. Refer to #4. The loss on inventory write down for the month of May is a. P139,700 c. P29,300 b. P137,300 d. P27,600 8. Refer to #4. The cost of sales, before loss on inventory write down, for the month of May is a. P1,778,000 c. P1,797,700 b. P1,685,600 d. P1,658,000
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