Warmfeet manufactures comforters. Assume the estimated inventories on January 1,
ID: 2469770 • Letter: W
Question
Warmfeet manufactures comforters. Assume the estimated inventories on January 1, 2012, for finished goods, work in process, and materials were $39,000, $33,000 and $27,000, respectively. Also assume the desired inventories on December 31, 2012, 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. Factory overhead was $156,000.
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 sold
$
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 sold
$
Explanation / Answer
calculation of cost of goods sold
for the year ended December 31,2012
Material 1 January 2012 $27000
Add: Direct material purchase. $ 575000
Total cost of direct material $ 602000
Less: direct material at the end. $ 21000
Cost of direct material placed in production $ 581000
Add: direct labor $ 212000
Factory overhead $ 156000
Total manufacturing cost $ 949000
Add: WIP at the beginning. $ 33000
Total WIP during the period . $ 982000
Less : WIP at the end $ 35000
Cost of goods manufactured $ 947000
Add finished goods at the beginning $ 39000
Cost of finished available for sale $ 986000
Less: finished goods at the end $ 42000
Cost of goods sold. $ 944000
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