Reference no: EM132778682
Problem - Paz Company has a cycle of 3 days, uses a Raw and in Process Account (RIP) and charges all conversion costs to cost of goods sold. At the end of each month, all inventories are counted, conversion costs components are estimated and inventory account balances are adjusted. Raw material cost is backflushed from Raw and in Process (RIP) Account to finished goods.
The following information is provided for the month of June:
Beginning Balance of RIP account, including P2,000 conversion cost 10,000
Beginning Balance of finished goods account including P12,000 conversion cost 20,000
Raw materials received on credit = 800,000
Direct labor cost = 600,000
Factory overhead applied = 1,000,000
Ending RIP inventory per physical count, including P14,000 conversion cost 40,000
Ending finished goods inventory per physical count, including P8,000 conversion cost 12,000
Required - What is the amount of conversion cost included cost of goods sold in June?