Sleep Tight manufactures comforters. The estimated inventories on January 1 for

Question

Sleep Tight manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $40,000, $31,000, and $28,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $44,000, $36,000, and $23,000, respectively. Direct material purchases were $580,000, direct labor was $227,000 for the year, and factory overhead was $144,000.

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.

Explanation / Answer

Sleep tight inc.

Cost of goods sold budget

For the Year Ending December 31

Finished goods inventory, January 1 40000 Work in process inventory, January 1 31000 Direct materials inventory, January 1 28000 Direct materials Purchases 580000 Cost of direct materials available for sale 608000 Less direct materials inventory December 31 23000 Cost of materials placed in production 585000 Direct labor 227000 Factory overhead 144000 Total manufacturing costs 926000 Total work in process during the period 957000 Less work in process inventory, December 31 36000 Cost of goods manufactured 921000 Cost of finished goods available for sale 961000 Less finished goods inventory, December 31 44000 Cost of goods sold 917000

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