Cost of Goods Sold Budget LifeTyme Publishers Inc. budgeted production of 191,90
ID: 2494196 • Letter: C
Question
Cost of Goods Sold Budget LifeTyme Publishers Inc. budgeted production of 191,900 diaries in 2014. Paper is required to produce a diary. Assume seven square yards of paper are required for each diary. The estimated January 1, 2014, paper inventory is 29,100 square yards. The desired December 31, 2014, paper inventory is 32,900 square yards. Paper costs $0.80 per square yard. Each diary requires assembly. Assume that nine minutes are required to assemble each diary. Assembly labor costs $16.00 per hour.
Explanation / Answer
Column1 Column2 Column3 Column4 Column5 Cost of Goods Sold Budget Units Amount Amount Calculation Direct Materials: Opening Inventory 29,100.00 23,280.00 29100*0.8 Consumption of paper 1,343,300.00 1,074,640.00 1343300*0.8 Closing Inventory 32,900.00 26,320.00 32900*0.80 Raw Material Purchases 1,347,100.00 1,077,680.00 Consumption + Closing - Opening Cost of materials placed in production 1,343,300.00 1,074,640.00 Consumption Direct Labour 460,560.00 Factory Overhead 205,800.00 Total Manufacturing costs 1,741,000.00 Material + Labour + Factory Overhead Add: Opening Stock of WIP 17,000.00 Less: Closing Stock of WIP 19,500.00 Cost of Goods Manufactured 1,738,500.00 Add: Opening Stock of Finished Goods 28,000.00 Less: Closing Stock of Finished Goods 23,700.00 Cost of Goods Sold Budget 1,742,800.00