Question

Good Night, Inc. manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $51,000, $28,000, and $33,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $48,000, $35,000, and $29,000, respectively. Direct materials purchases were $555,000. Direct labor was $252,000 for the year. Factory overhead was $176,000.

Required:

Prepare a cost of goods sold budget for Good Night, Inc. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Be sure to complete the statement heading.

Labels and Amount Descriptions

Labels
For the Year Ending December 31
Direct materials
Amount Descriptions
Cost of direct materials placed in production
Cost of finished goods available for sale
Cost of direct materials available for use
Costs of good manufactured
Costs of goods sold
Direct labor
Direct materials inventory, December 31
Direct materials inventory, January 1
Direct materials purchases
Factory overhead
Finished goods inventory, December 31
Finished goods inventory, January 1
Total manufacturing costs
Total work in process during the period
Work in process inventory, December 31
Work in process inventory, January 1

Cost of Goods Sold Budget

Prepare a cost of goods sold budget for Good Night, Inc. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Be sure to complete the statement heading.

Good Night Inc.

Cost of goods sold budget

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Answer 1

Schedule of Cost of Goods Sold
Direct Materials
Raw Material, Beginning Inventory	$    33,000.00
Add: Purchases	$ 5,55,000.00
Total Raw Material Available	$ 5,88,000.00
Deduct : Raw Material in inventory, ending	$    29,000.00
Raw Material used in production		$   5,59,000.00
Direct Labor		$   2,52,000.00
Manufacturing Overhead		$   1,76,000.00
Total Manufacturing Costs		$   9,87,000.00
Add: Beginning Work in Process Inventory		$      28,000.00
		$ 10,15,000.00
Deduct: Ending Work in Process Inventory		$      35,000.00
Cost of Goods Manufactured		$   9,80,000.00
Add : Finished Goods Inventory, Beginning		$      51,000.00
Cost of Goods Available for sale		$ 10,31,000.00
Deduct : Finished Goods Inventory, Ending		$      48,000.00
Cost of goods sold		$   9,83,000.00