Based on physical inventory at year-end, Carlo Company determined the chocolate inventory on a FIFO basis at P3,200,000 with a replacement cost of P3,000,000. The Company estimated that , after further processing costs of P1,000,000, the chocolate could be sold as finished candy bars for P4,500,000. The normal profit margin is 15% of sales.

What amount should be reported as chocolate inventory at year-end?

a. P3,050,000

b. P3,500,000

c. P3,200,000

d. P3,000,000