Question

Cost of Goods Sold Budget Daybook Inc. budgeted production of 403,500 personal journals in 20Y6. Paper is required to produce a journal. Assume six square yards of paper are required for each journal. The estimated January 1, 20Y6, paper inventory is 40,400 square yards. The desired December 31, 20Y6, paper inventory is 38,900 square yards. Paper costs $0.40 per square yard. Each journal requires assembly. Assume that eight minutes are required to assemble each journal. Assembly labor costs $13.00 per hour Prepare a cost of goods sold budget for Daybook Inc. using the information above. Assume the estimated inventories on January 1, 20Y6, for finished goods and work in process were $28,000 and $16,500, respectively. Also assume the desired inventories on December 31, 20Y6, for finished goods and work in process were $30,000 and $14,300, respectively. Factory overhead was budgeted at $214,600. Round your interim calculations to nearest cent, if required DAYBOOK INC. Cost of Goods Sold Budget For the Year Ending December 31, 20Y6 Direct materials: $ Cost of direct materials placed in production Total work in process during period

Answer 1

DAYBOOK INC
Cost of Goods Sold Budget
For the Year ending December 31, 2016
Finished Goods Inventory january 1, 2016			28,000.00
Work in process inventory, January 1, 2016		16,500.00
Direct materials:
Direct materials inventory, January 1, 2016	16,160.00
Direct materials purchases	967,800.00
Cost of direct materials available for use	983,960.00
Less direct materials inventory,December 31, 2016	15,560.00
Cost of Materials placed in Production	968,400.00
Direct labor	699,400.00
Factory overhead	214,600.00
Total Manufacturing Costs		1,882,400.00
Total work in process during period		1,898,900.00
Less work in process inventory, December 31, 2016		14,300.00
Cost of Goods Manufactured			1,884,600.00
Cost of Finished Available for Sale			1,912,600.00
Less finished goods inventory, December 31, 2016			30,000.00
Cost of Goods Sold			1,882,600.00