Question

Labels and Amount Descriptions

Cost of Goods Sold Budget

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Instruction

Sleep Tight, Inc. manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $38,000, $32,000, and $28,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $43,000, $34,000, and $22,000, respectively. Direct materials purchases were $570,000, direct labor was $220,000 for the year, and factory overhead was $145,000.

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.

Labels
For the Year Ending December 31
Direct materials
Amount Descriptions
Cost of direct materials placed in production
Cost of finished goods available for sale
Cost of direct materials available for use
Costs of good manufactured
Costs of goods sold
Direct labor
Direct materials inventory, December 31
Direct materials inventory, January 1
Direct materials purchases
Factory overhead
Finished goods inventory, December 31
Finished goods inventory, January 1
Total manufacturing costs
Total work in process during the period
Work in process inventory, December 31
Work in process inventory, January 1

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.

Sleep Tight, Inc.

Cost of Goods Sold Budget

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Answer 1

Solution

Sleep Tight, Inc.
Cost of Goods Sold Budget
For the Year Ending December 31
Finished goods inventory, January 1			$       38,000.00
Work in process inventory, January 1		$       32,000.00
Direct materials:
Direct materials, January 1	$       28,000.00
Direct materials purchases	$      570,000.00
Cost of direct materials available for sale	$      598,000.00
Less direct materials inventory, December 31	$       22,000.00
Cost of direct materials placed in production	$      576,000.00
Direct labor	$      220,000.00
Factory overhead	$      145,000.00
Total manufacturing costs		$      941,000.00
Total work in process during the period		$      973,000.00
Less work in process inventory, December 31		$       34,000.00
Cost of goods manufactured			$      939,000.00
Cost of finished goods available for sale			$      977,000.00
Less finished goods inventory, December 31			$       43,000.00
Cost of goods sold			$      934,000.00