445 PROBLEM SOLVING: 46 For Question Nos. Ito 47 NBA, Inc. is engaged in the business of manufacturing basket balls. The company employs actual costing system. 48 The company uses a single account for direct and indirect materials. The company provided the following data 49 for the year ended December 31, 2016 DU 51 2 Gross sales Sales returns Gross purchases Purchases returns, allow. and discount Freight in 1,000,000 300,000 100,000 500,000 2,000,000 3,000,000 54 55 56 D/ 58 59 50 51 52 9,500,000 Total costs of factory labor 500,000 Depreciation of factory assets 1,000,000 Expired insurance on factory assets 200,000 Utilities expense on factory 400,000 Total administrative expenses Total marketing expenses The following additional data are provided 1. The net profit ratio of the company before income tax for the year ended Dec. 31, 2016 was 10% of Net Sales 2. The direct labor cost for the year was four times the cost of indirect labor 3. The cost of indirect materials used was P 100,000 Inventories are as follows: Jan 1 Raw materials 100,000 Work in process ? Finished goods 500,000 Dec 31 300,000 200,000 600,000 1 What is the total prime cost P 1,700,000 b. a P 2,000,000 P 1,800,000 d. P 1,900,000 2 What is the fatal conversion cost? a P 1,900,000 b. P 2,000,000 P 2,100,000 d. P 2,200,000 70 71 12 73 74 75 3. What is the cost of goods manufactured? P 3,100,000 b. P 3,300,000 c P 3,200,000 d. P 3,000,000 4. a What are the cost of goods sold and the cost of work in process on January 1, 2016? P 3,200,000 and b. P 3,000,000 and P 2.900,000 and P 300,000 P 400,000 P 600,000 77 78 79 30 d. P 3,100,000 and P 500,000