Warmfeet manufactures comforters. Assume the estimated inventories on January 1,
ID: 2445992 • Letter: W
Question
Warmfeet manufactures comforters. Assume the estimated inventories on January 1, 2012, for finished goods, work in process, and materials were $38,000, $34,000 and $29,000 respectively. Also assume the desired inventories on December 31, 2012, for finished goods, work in process, and materials were $44,000, $33,000 and $21,000 respectively. Direct material purchases were $580,000. Direct labor was $240,000 for the year. Factory overhead was $145,000.
Prepare a cost of goods sold budget for Warmfeet, Inc.
Warmfeet, Inc. Cost of Good Sold Budget For the Year Ending December 31, 2012 Finished goods inventory, January 1, 2012 Work in process inventory, January 1, 2012 Direct materials inventory, January 1, 2012 Direct materials purchases Cost of direct materials available for sale Less direct materials inventory December 31, 2012 Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during the period Less work in process inventory, December 31, 2012 Costs of goods manufactured Cost of finished goods available for sale Less finished goods inventory, December 31, 2012 Costs of goods soldExplanation / Answer
Warmfeet , Inc
Cost of Goods sold budget for the year ending
December 31 , 2012
Particulars Amount Amount Amount
Finished Goods inventory, Jan 1, 2012 38000
Work in progress inventory,Jan 1,2012 34000
Direct materials inventory, Jan 1,2012 29000
Direct materials purchases 580000
Cost of directmaterials available for sale 609000
(less)Direct material inventory,Dec31,2012 (21000)
Cost of direct material place in production 588000
Direct labour 240000
Factory overheads 145000
Total manufacturing cost 973000
Total work in progress during the period 1007000
(less) work in progress inventory Dec31, 2012 (33000)
Cost of goods manufactured 9741000
Cost of goods available for sale 1012000
(less) Finished goods inventory Dec31,2012 (44000)
Cost of goods sold 968000.
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