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 $39,000, $33,000, and $27,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $42,000, $35,000, and $21,000, respectively. Direct material purchases were $575,000, direct labor was $212,000 for the year, and factory overhead was $156,000. 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. Labels For the Year Ending December 31 Direct materials

Explanation / Answer

Solution:

Cost of Goods Sold Budget Particulars Details Amount Direct materials: Direct materials Inventory, January 1 $27,000.00 Add: Direct materials Purchases $575,000.00 Cost of Direct material Available for use $602,000.00 Deduct: Direct materials Inventory, December 31 $21,000.00 Cost of Direct Material used in production $581,000.00 Direct labor $212,000.00 Factory overhead $156,000.00 Total Manufacturing Costs $949,000.00 Add: work in process Inventory, January 1 $33,000.00 Deduct:Work in process Inventory, December 31 $35,000.00 Cost of goods manufactured $947,000.00 Finished goods Inventory, January 1 $39,000.00 Cost of Finished Goods available for sale $986,000.00 Deduct: Finished goods Inventory, December 31 $42,000.00 Cost of Goods sold $944,000.00

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