The cost of ending inventory is: Daily Custom Company manufactures plastic chairs in its Processing Department. Direct materials are included at the inception of the process. Conversion costs are incurred evenly throughout the process. The machine roke down at 60% stage of completion due to inefficient operator that caused some of the units in process to be spoiled with no market value. Daily Custom Company uses FIFO in accumulating costs. Data provided for Sentember of the current year are as follows Work in process, beg. Started 30,000 units Mat-100%; CC-89.5% 80,000 units 86,000 units Completed & transferred Work in process, end Costs: 20,000 units Mat-100%; CC-75% Work in Process, beg. Materials P70,000 40,000 Conversion costs Added during the period: Materials P160,000 Conversion costs 122,480

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…