Hector P Wastrel. a careless employee, left some combustible matenal near and open flame m Salter company’s plant. The resulting explosion and fire destroyed the entire plant and admirustrative Quick. the company’s controller, and Constance Trucheart, the operations manager, „, able to save only a few bits of information as they escaped from the roaring blaze. -What a disaster.” cried Justin. “And the worst pan is that we have no records to use in filing an insurance claim.” know,” replied Constance. “I was in the plant when the explosion occurred. and I managed w smh only this brief summary sheet that contains information on one or two of our costs. ft says that our direct labor cost this year has totaled SI 80,000 and that we have purchased 1290.000 in rs• materials. But I’m afraid that doesn’t help much; the rest of our records are just ashes.” “Well. not completely,” said Justin. “I was working on the year-to-date income statement when the explosion knocked me out of my chair. I instinctively held onto the page I was working on, and from what I can make out, our sales to date this year have totaled S1.200,000 and our gross margin rate has been 40% of sales. Also, I can see that our goods available for sale to customers has totaled 5810.000 at cost.’ “Maybe we’re not on had off after all.” exclaimed Constance. “My sheet says that prime cost has totaled $410,000 so far this year and that manufacturing overhead is 70% of conversion cost. Now if we just had some information on our beginning inventories.” “Hey, look at this,” cried Justin. “It’s a copy of last year’s annual report, and it shows what our inventories were when this year started_ Let’s see, raw materials was $18,000, work in process was 565.000, and finished goods was $45,000. “Super,” yelled Constance. “Let’s go to work.” To file an insurance claim, the company must determine the amount of cost in its insentories as of the date of the fire. You may assume that all materials used in production during the year were direct materials.
Reotmed.
Determine the amount of cost in the Raw materials, work to rrocess, ana mimeo woos inven-tory accounts as of the date of the fire. (Hint: One may to proceed would be to reconstruct the var-ious schedules and statements that would have bets affected by the company’s inventory accounts during the period.)
Answer:

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