A distraught employee, Guy Pirault-Manne, put a torch to a manufacturing plant on a blustery day, 26 February 2022. The resulting blaze completely destroyed the plant and its contents.

Fortunately, certain accounting records were kept in another building. They revealed the following for the period from 1 January 2022 to 26 February 2022:

The loss was fully covered by insurance. The insurance company wants to know the historical cost of the stocks as one factor considered when negotiating a settlement.
Required Calculate the cost of:
1 Finished goods stock, 26 February 2022.
2 Work-in-progress stock, 26 February 2022.
3 Direct materials stock, 26 February 2022.

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Direct materials purchased Work in progress, 1 January 2022 Direct materials, 1 January 2022 Finished goods, 1 January 2022 Indirect manufacturing costs Revenues Direct manufacturing labour Prime costs Gross margin percentage based on sales Cost of goods available for sale 3.2 million 680 000 320 000 600 000 40% of conversion costs 10 million 3.6 million 5.88 million 20% 9 million