Question

Sleep Tight, Inc., manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $38,000, $33,000, and $26,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $45,000, $38,000, and $20,000, respectively. Direct materials purchases were $575,000, direct labor was $206,000 for the year, and factory overhead was $152,000.

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

Finished goods inventory, January 1 $ ____

Work in process inventory, January 1 $____

Direct materials:

Direct materials, January 1 $____

Direct materials purchases ____

Cost of direct materials available for sale $____

Direct materials inventory, December 31 _____

Cost of direct materials placed in production$____

Direct labor _____

Factory overhead _____

Total manufacturing costs _____

Total work in process during the period $_____

Work in process inventory, December 31 ______

Cost of goods manufactured _____

Cost of finished goods available for sale $_____

Finished goods inventory, December 31 _____

Cost of goods sold $_____

Answer 1

Schedule of cost of goods sold

Finished goods inventory, January 1 $				38000
Work in process inventory, January 1 $			33000
Direct material
Direct materials, January 1	26000
Direct material purchase	575000
Cost of direct materials available for sale	601000
Direct materials inventory, December 31	-20000
Cost of direct materials placed in production		581000
Direct labor		206000
Factory overhead		152000
Total manufacturing cost			939000
Total work in process during the period			972000
Less: Work in process inventory, December 31			-38000
Cost of goods manufactured				934000
Cost of finished goods available for sale				972000
Less: Finished goods inventory, December 31				-45000
Cost of goods sold				927000