Warmfeet manufactures comforters. Assume the estimated inventories on January 1,
ID: 2446195 • 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, $31,000 and $24,000 respectively. Also assume the desired inventories on December 31, 2012, for finished goods, work in process, and materials were $41,000, $34,000 and $19,000 respectively. Direct material purchases were $560,000. Direct labor was $232,000 for the year. Factory overhead was $154,000.
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
Correct 5
Work in process inventory, January 1, 2012
Correct 7
Direct materials inventory, January 1, 2012
Correct 9
Direct materials purchases
Correct 11
Cost of direct materials available for sale
Correct 13
Less direct materials inventory December 31, 2012
Correct 15
Cost of direct materials placed in production
Correct 17
Direct labor
Correct 19
Factory overhead
Correct 21
Total manufacturing costs
Correct 23
Total work in process during the period
Correct 25
Less work in process inventory, December 31, 2012
Correct 27
Costs of goods manufactured
Correct 29
Cost of finished goods available for sale
Correct 31
Less finished goods inventory, December 31, 2012
Correct 33
Costs of goods sold
Correct 35
Warmfeet, Inc.
Cost of Good Sold Budget
For the Year Ending December 31, 2012
Finished goods inventory, January 1, 2012
$Correct 5
Work in process inventory, January 1, 2012
$Correct 7
Direct materials inventory, January 1, 2012
$Correct 9
Direct materials purchases
Correct 11
Cost of direct materials available for sale
$Correct 13
Less direct materials inventory December 31, 2012
Correct 15
Cost of direct materials placed in production
$Correct 17
Direct labor
Correct 19
Factory overhead
Correct 21
Total manufacturing costs
Correct 23
Total work in process during the period
$Correct 25
Less work in process inventory, December 31, 2012
Correct 27
Costs of goods manufactured
Correct 29
Cost of finished goods available for sale
Correct 31
Less finished goods inventory, December 31, 2012
Correct 33
Costs of goods sold
$Correct 35
Explanation / Answer
Warmfeet Inc Cost of Goods sold Budget for the year ending December 31 2012
Inventory Work in process Finished Goods Beginning Finished goods inventory $39,000 Beginning Work in process Inventory $31,000 Beginning Direct Materials Inventory $24,000 Direct Material purchase $5,60,000 Cost of Materials available for Sale $5,84,000 Less: Ending Direct Materials Inventory $19,000 Cost of Materials Placed in Production $5,65,000 Direct Labour $2,32,000 Factory Overhead $1,54,000 Total Manufacturing Cost $9,51,000 Total Work in Process during the year $9,82,000 Less: Ending Work in process inventory $34,000 Cost of Goods Manufactured $9,48,000 Cost of Finished goods available for Sale $9,87,000 Less: Closing finished goods inventory $41,000 Cost of goods sold $9,46,000