On January 31, 2012, the manufacturing facility of a medium-sized company was severely damaged by an accidental fire. As a result, the company's direct materials, work in process, and finished goods inventories were destroyed. The company did have access to certain incomplete accounting records, which revealed the following:

1. Beginning inventories, January 1, 2012:

Direct materials ................................................$32,000

Finished goods .................................................$30,000

Work in process ................................................$68,000

2. Key ratios for the month of January 2012:

Gross profit = 20% of sales

Prime costs = 70% of manufacturing costs

Factory overhead = 40% of conversion costs

Ending work in process is always 10% of the monthly manufacturing costs.

3. All costs are incurred evenly in the manufacturing process.

4. Actual operations data for the month of January 2012:

Sales ...............................................................$900,000

Direct labour incurred ...........................................$360,000

Direct materials purchases ......................................$320,000

Instructions

(a) From the above data, reconstruct a cost of goods manufactured schedule.

(b) Calculate the total cost of inventory lost, and identify each category where possible (i.e., direct materials, work in process, and finished goods), at January 31, 2012.