Question

Instructions Cost of Goods Sold Budget Instructions Cost of Goods Sold Budget Magnolia Candle Inc. budgeted production of 74,200 candles in 2016. Wax is required to produce a candle. Assume eight ounces (one half of a pound) of wax is required for each candle. The estimated January 1, 2016, wax inventory is 2,500 pounds. The desired December 31, 2016, wax inventory is 2,100 pounds. Candle wax costs $4.10 per pound. Each candle requires molding. Assume that 12 minutes are required to mold each candle. Molding labor costs $14.00 per hour. Cost of Goods Sold Budget Prepare a cost of goods sold budget for Magnolia Candle Inc., using the information above. Assume the estimated inventories on January 1, 2016, for finished goods and work in process were $9,800 and $3,600, respectively. Also assume the desired inventories on December 31, 2016, for finished goods and work in process were $12,900 and $3,500, respectively. Factory overhead was budgeted at $109,600. Round your interim calculations to nearest cent, if required. Magnolia Candle Inc. Cost of Goods Sold Budget For the Year Ending December 31, 2016 Direct materials: Check My Work 2 more Check My Work uses remaning Previous Next

Answer 1

Cost of good sold Budget
Finished Goods Inventory, Jan 1 2016			9800
work in process, jan 1 2016		3600
Direct material
Direct material inventory, Jan 1 2016 (2500*4.1) D	10250
Direct material purchases C-D	150470
Cost of direct material available for use C=A+B	160720
Less: Direct Material Inventorym Dec 31 (2100*4.1) A	8610
Cost of Direct material placed in production (74200*1/2*4.1) B	152110
Direct Labor (74200*12/60*14)	207760
Factory overhead	109600
Total Manufacturing cost		469470
Total WIP during period		473070
Less: WIP, Dec 31		3500
Cost of goods manufactured			469570
Cost of Finished goods Avaialbel for sale			479370
Less: finished Goods iNventory, Dec 31			12900
Cost of good sold			466470
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