# Problem 4 upload - Blankets of Blankets Sales price blanket...

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Problem 4 – relative sales value method Jigsaw Factory started operations in 2010. Jigsaw manufactures blankets. 60% of the production are “Class A” which s sell for P500 a piece and 40% are “Class B” which sell for P250 each. During 2010, 6000 blankets were produced at an average cost of P360 per piece. The inventory at the end of the year follows: 220 “Class A” at P 360 P79, 200 300 “Class B” at P360 108,000 P187,200 Using the relative sales value method, which would Jigsaw considers as a more equitable basis of cost distribution by answering the following questions: 1. How much of the total cost should be allocated to Class A 2. How much of the total cost should be allocated to Class B 3. How much is the value of inventory as of Dec 31, 2010 4. How much is the cost of sales for the year 2010 5. How much is the gross profit for 2010 Jazzer Estrellanes BABA2A 3.) 166,500 = [2,160,000 – 1,993,000] / Total Cost – Total COGS
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Unformatted text preview: Blankets # of Blankets Sales price/ blanket Total Sales Price Relative Sales Price Total Cost Cost Allocated per each class Cost per piece A 3600 500 1,800,000 ¾ 2,160,000 1,620,000 (1) 450 B 2400 250 600,000 ¼ 2,160,000 540,000 (2) 225 Total 6000 2,400,000 2,160,000 Blankets # of Blankets Sold Cost per Blanket COGS Sales Gross Profit A 3380 450 1,521,000 1,690,000 169,000 B 2100 225 472,500 525,000 52,500 Total 5480 1,993,500 (4) 2,215,000 221,500 (5) *Formulas: COGS = # of Blankets Sold x Cost per Blanket Sales = # of Blankets Sold x Sales price per blanket Gross Profit = Sales – COGS Cost per piece = Cost Allocated per piece / # of Blankets Cost Allocated per piece = Total Cost x Relative Sales Price Relative Sales Price = Total Sales price of each category / Total Sales price of overall categories Total Sales Price = Sales price x # of Blankets...
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