ABC Manufacturing Company's Cost of Goods Sold for the year amounted to 6,900,000. The work in process at the end was 90% of the beginning Work in Process inventory. Factory overhead was applied at 60% of direct labor costs. On January 1, inventories showed the following balances:

Finished Goods2,040,000

Work in Process800,000

Direct Materials400,000

Factory Supplies180,000

During the period, the following purchases were recorded:

Direct Materials3,200,000

Factory supplies900,000

It was also noted that Finished Goods decreased by P320,000 while direct materialsand factory supplies increased by P180,000 and P50,000, respectively.

Determine the costs of materials, labor and overhead added during the periodduring the period.

Ps.

Hello, can I ask whether 1 or 2 is correct. I'm stuck between my 2 computations. Idk whether I'm on the right track. Sorry to bother. qwq

Gross profit assuming 75% of the production is sold at a gross profit rate of 35%.

(1)

COGMA 4,567,500 75% = COGS 3,425,625 x 35% = 1,198,969

or

(2)

(3,425,625 65%)= SALES 5,270,192 - 3,425,625 = 1,844,567

The company uses the actual costing method of accumulating costs and it maintains a 35% mark up on establishing its selling price.

Cogs 3,470,000

(1)

Gross profit = (3,470,000 65%) x 35%

GP = 1,868,462

or

(2)

Gross profit = (3,470,000 1.35) - 3,470,000 = 1,214,500