OLPROFE06 ACTIVITY 3

Dasol Factory started operations in 2006. Dasol manufactures bath towels. 60% of
the production are "Class A" which sell for P500 per dozen and 40% are "Class B"
which sell for P250 per dozen. During 2006, 6,000 dozens were produced at an
average cost of P360 per dozen. The inventory at the end of the year was as
follows:
220 dozens "Class A" @ P360 P 79,200
300 dozens "Class B" @ P360 108,000
P187,200

1. How much is the cost of goods sold for product A?\\

Ans. 1,216,800
Solution
6,000 x 60% = 3,600
3,600 x 360 = 1,296,000 Total cost of Production
Total cost of Production – Inventory (Class A) = cost of goods sold
1,296,000 – 79,200 = 1,216,800

2. Based on Problem in Question 1, What is the cost of goods sold of product B?

Ans. 756,000
Solution:
6,000 x 40% = 2,400
2,400 x 360 = 864,000 Total cost of Production
Total cost of Production – Inventory (Class B) = Cost of goods sold
864,000 – 108,000= 756,000

3. Based on Problem in Question 1, What is the Gross Profit of Product A?

Ans.
Solution
Sales of Class A ((3,600 – 220) x P500) P1,690,000
Less: Cost of goods sold 1,216,800
Gross Profit 473,200

4. Based on Problem in Question 1, What is the sales of product B?

Ans. 525,000
Solution
((2,400 – 300) x P250) = P525,000
Sales of Class B = P525,000