Magnolia Candle Inc. budgeted production of 74,200 candles in 20Y4. Wax is requi

Question

Magnolia Candle Inc. budgeted production of 74,200 candles in 20Y4. Wax is required to produce a candle. Assume that eight ounces (one-half of a pound) of wax is required for each candle. The estimated January 1, 20Y4, wax inventory is 2,500 pounds. The desired December 31, 20Y4, 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. Prepare a cost of goods sold budget for Magnolia Candle Inc., using the information above. Assume that the estimated inventories on January 1, 20Y4, for finished goods and work in process were $9,800 and $3,600, respectively. Also assume that the desired inventories on December 31, 20Y4, 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, 20Y4 Direct materials: Cost of direct materials placed in production Total work in process during the period

Explanation / Answer

Cost of goods sold budget Beginning Finished goods Inventory $9,800 Beginning Work in Process $3,600 Direct Material: Beginning raw material $10,250 Raw material purchased $150,470 Raw material available $160,720 Ending raw material $8,610 Cost of material placed in production $152,110 Direct Labour $207,760 Factory overheads $109,600 Total cost of production during the period $469,470 Total work in process during the period $473,070 Ending work in process $3,500 Total cost of goods manufactured $469,570 Total finished goods inventory $479,370 Ending finished goods inventory $12,900 Cost of goods sold $466,470 Notes: Raw material required (74200 x 1/2 pound) 37100 Add: Ending inventory 2100 Less: Beginning inventory 2500 Raw material purchased 36700 Cost per pound $4.10 Cost of raw material purchased $150,470 Direct labor Hours required 14840 Per hour rate $14 Total labor cost $207,760

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.