Lagoon Company accumulated the following data for the current year. Raw materials - beginning inventory, 90,000 units at P7/unit; Purchases of 75,000 units @ P8/unit; Purchases of 120,000 units @ P8.50/unit. The entity transferred 195,000 units of raw materials to work in process during the year. Work in process - beginning inventory is 50,000 units @ P14/unit. Direct labor is P3,100,000; Manufacturing overhead is P2,950,000 and Work in process-ending inventory is 48,000 units @ P15/unit. The entity used the FIFO method for valuing inventory. What is the cost of raw materials used?

Problem 4 - Based on the facts of Lagoon Company (problem above), how much is the total manufacturing cost?

Problem 5 - Apitong Company manufactures bath towels. The production comprises 60% of "Class A" which sells for P500 per dozen and 40% of "Class B" which sells for P250 per dozen. During the current year, 60,000 dozens were produced at an average cost of P360 a dozen. The entity revealed the following inventory at the end of current year: 2,200 dozens "class A" @ P360 is P792,000 and 3,000 dozens "Class B" at P360 is P1,080,000. Using the relative sales value method which management considers as a more equitable basis of cost distribution, what is the measurement of the inventory?


Problem 6 - Aloha Company determined the following information for an inventory at year-end: Historical cost - P2,000,000; Current replacement cost - P1,400,000; NRV is P1,800,000; Net realizable value less a normal profit margin is P1,700,000 and Fair value is P1,900,000. What should be reported as inventory at year end?