Question

Sleep Tight manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $40,000, $34,000, and $28,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $44,000, $35,000, and $19,000, respectively. Direct material purchases were $550,000, direct labor was $246,000 for the year, and factory overhead was $146,000.

Required:

Prepare a cost of goods sold budget for Sleep Tight, 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.

Answer 1

Answer

	Sleep Tight, Inc.
	Cost of Goods Sold Budget
	For the Year Ending December 31
1	Finished goods inventory, January 1			$40,000
2	Work in process inventory, January 1		$34,000
3	Direct materials
4	Direct materials inventory, January 1	$28,000
5	Add:Direct materials purchases	$550,000
6	Cost of direct materials available for use	$578,000
7	Less: Direct materials inventory, December 31	$19,000
8	Cost of direct materials placed in production		$559,000
9	Direct labor		$246,000
10	Factory overhead		$146,000
11	Total manufacturing costs		$951,000
12	Total work in process during the period		$985,000
13	Less: Work in process inventory, December 31		$35,000
14	Costs of good manufactured			$950,000
15	Cost of finished goods available for sale			$990,000
16	Less: Finished goods inventory, December 31			$44,000
17	Costs of goods sold			$946,000