FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The balance sheet of Barangay Manufacturing Company showed the following balances on December 31, 2021:

Finished goods - P2,100,000
Work in process - 1,680,000
Raw materials - 2,800,000

During the first quarter of 2022, prime costs amounted to P19,152,000 while conversion costs amounted to P11,088,000.  The average direct labor rate was P53.90 and overhead was applied at P43.12 per direct labor hour.  Purchases of raw materials were P14,000,000 while costs of goods manufactured were P24,360,000.  The company continue its policy to maintain a gross profit rate of 30%.  At the end of the quarter, costs of sales amounted to P23,520,000.

The change in Work in Process inventory for the first quarter is

a. Increase of P280,000
b. Decrease of P7,560,000
c. Increase of P7,560,000
d. Decrease of P280,000
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