Question

Cost of Goods Manufactured

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs:

Direct materials	?
Direct labor	$65,000
Variable overhead	21,000
Fixed overhead	250,000

Next year, Pietro expects to purchase $121,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$4,000	$12,500
Ending	$3,900	$14,500

Required:

Hide 1. Prepare a statement of cost of goods manufactured. Pietro Frozen Foods, Inc. Statement of Cost of Goods Manufactured For the Coming Year Direct materials $   Materials available $   Direct materials used in production $   Total manufacturing costs added $   Cost of goods manufactured $

2. What if the ending inventory of direct materials increased by $2,400? Indicate the affect that this would have on the items listed below:

	Direction of change			Amount
Direct materials used	- Select your answer -no changeincreasedecreaseCorrect 1 of Item 2	by		$
Total manufacturing costs	- Select your answer -no changeincreasedecreaseCorrect 3 of Item 2	by		$
Cost of goods manufactured	- Select your answer -no changeincreasedecreaseCorrect 5 of Item 2	by		$

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer 5 Part 1) 5 Pietro Frozen Food Inc. 7 Statement of cost of goods manufactured 3 For coming Year - Direct Material Beginning inventory 1 Purchases 2 Material Available 3 Less ending inventory Direct Material Used in Production 5 Direct Labour 5 Manufacturing overheads (21000+250000) 7 Total manufacturing cost added 3 Beginning work in process Less ending work in process Cost of goods manufactured 4000 121500 125500 3900 121600 65000 271000 457600 12500 14500 455600 2 Part 2) 4 Direct Material used (121600-2400 = $119200) 5 Total manufacturing cost (457600-2400 = $455200) 5 Cost of goods manufactured (455600-2400 = 453200) Direction of change Decrease By Decrease By Decrease By Amount 2400 2400 24001 3 For any help please comment in the comment box Thank You