Question

Sleep Tight, Inc., manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $36,000, $32,000, and $28,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $42,000, $36,000, and $23,000, respectively. Direct materials purchases were $555,000, direct labor was $219,000 for the year, and factory overhead was $140,000.

Prepare a cost of goods sold budget for Sleep Tight, Inc.

Sleep Tight, Inc.
Cost of Goods Sold Budget
For the Year Ending December 31
Finished goods inventory, January 1			$
Work in process inventory, January 1		$
Direct materials:
Direct materials, January 1	$
Direct materials purchases
Cost of direct materials available for sale	$
Direct materials inventory, December 31
Cost of direct materials placed in production	$
Direct labor
Factory overhead
Total manufacturing costs
Total work in process during the period		$
Work in process inventory, December 31
Cost of goods manufactured
Cost of finished goods available for sale			$
Finished goods inventory, December 31
Cost of goods sold			$

Answer 1

Solution

Sleep Tight, Inc.
Cost of Goods Sold Budget
For the Year Ending December 31
Finished goods inventory, January 1			$   36,000.00
Work in process inventory, January 1		$ 32,000.00
Direct materials:
Direct materials, January 1	$   28,000.00
Direct materials purchases	$ 555,000.00
Cost of direct materials available for sale	$ 583,000.00
Less direct materials inventory, December 31	$   23,000.00
Cost of direct materials placed in production	$ 560,000.00
Direct labor	$ 219,000.00
Factory overhead	$ 140,000.00
Total manufacturing costs		$ 919,000.00
Total work in process during the period		$ 951,000.00
Less work in process inventory, December 31		$ 36,000.00
Cost of goods manufactured			$ 915,000.00
Cost of finished goods available for sale			$ 951,000.00
Less finished goods inventory, December 31			$   42,000.00
Cost of goods sold			$ 909,000.00