YELLOW CORP (a NON-VAT registered) engaged in selling CALCULATORS incurred the following cost during 2023:

a) Raw materials acquired from MINI Corp amounted to P268,800, VAT inclusive.

b) Raw materials acquired from BLUE CORP amounted to P200,000, VAT exclusive.

c) Production overheads (fixed) amounting to P550,000. The entitys normal capacity is 100,000 machine hours but the company only used 65% of normal machine hours.

d) Administrative overheads unrelated to production amounted to P67,000.

e) Freight cost from supplier to YELLOW amounted to P10,000.

f) Freight cost from YELLOW to its customers amounted to P5,000

g) YELLOW purchased CALCULATORS from another supplier with a list price of P45,000.

Quantity discounts of 10, 20 are allowed by supplier to induce the purchase transaction.

h) Goods acquired from PURPLE CORP, entity's major supplier, under an extended credit term

amounted to P200,000 The selling price to be paid under normal credit term is P150,000.

i) Wasted and spoiled materials within tolerable level amounted to P35,000. Abnormal amount of these losses was P38,500.

j) Insurance cost while the inventories are in transit from a supplier is P12,000

k) Insurance cost of inventories inside the warehouse for probable loss is P10,000

l) Storage cost of finished CALCULATORS is P7,000.

1. The total inventory costs of YELLOW CORP shall be

A. 1,046,900

B. 1,059,700

C. 1,089,700

D. 1,139,700

2. The total expense for the year 2023 shall be

A. 72,000

B. 79,000

C. 119,640

D. 127,500