Question

Sleep Tight, Inc. manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $37,000, $32,000 and $29,000 respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $41,000, $38,000 and $19,000 respectively. Direct materials purchases were $575,000. Direct labor was $233,000 for the year. Factory overhead was $154,000.

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	$
Less 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		$
Less work in process inventory, December 31
Cost of goods manufactured
Cost of finished goods available for sale			$
Less finished goods inventory, December 31
Cost of goods sold			$

Answer 1

Sleep Tight, Inc.
Cost of Goods Sold Budget
For the Year Ending December 31
Finished goods inventory, January 1			$37,000
Work in process inventory, January 1		$32,000
Direct materials:
Direct materials, January 1	$29,000
Direct materials purchases	$575,000
Cost of direct materials available for sale	$604,000
Less direct materials inventory, December 31	$19,000
Cost of direct materials placed in production	$585,000
Direct labor	$233,000
Factory overhead	$154,000
Total manufacturing costs		$972,000
Total work in process during the period		$1,004,000
Less work in process inventory, December 31		$38,000
Cost of goods manufactured			$966,000
Cost of finished goods available for sale			$1,003,000
Less finished goods inventory, December 31			$41,000
Cost of goods sold			$962,000