Baltimore Manufacturing Corporation (BMC) incurred the below expenditure for 2020 for the manufacture of portable heaters. During the year 2020, BMC suffered flood damages, and as a result, all raw materials were totally damaged. BMC was able to calculate the amounts for all the other cost elements except the raw materials used.

A. Consequently, BMC has engaged you, a forensic accountant, to compute the amount recoverable from its insurance company for raw materials used (Show your work below).

Direct labor…………………………………………………….$60,000

Factory Foremen wages………………………………………..$32,000

Raw materials used for manufacturing…………………………$27,000

Purchases of raw materials……………………………………...$18,000

Import duties on raw materials…………………………………$7,000

Freight-in on raw materials……………………………………..$4,500

Factory overhead costs………………………………………….$3,000

B. Which of the following is the correct answer?

1. (a) $56,500 
2. (b) $88,000 
3. (c) $120,500 
4. (d) $180,500 
5. (e) $183,500 
6. (f) None of the above

Answer rating: 100% (QA)

Direct labor 60000 Factory foremen wages 3200... View the full answer