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Peter Senen Company has over applied overhead of P60,000 for the year. Before disposition of over applied overhead, selected year end balances from Peter Senen Company's accounting records were:
Sales P1,000,000
Cost of Goods Sold 750,000
Direct Material Inventory 50,000
Work in process inventory 180,000
Finished goods inventory 270,000
Problem 1: Under Peter Senen Company's accounting system, over or under applied overhead is allocated to appropriate inventories and COGS based on year end balances. In its year end Income statement, the Company should report COGS of:
a. P714,000
b. P787,500
c. P712,500
d. P730,000
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