Preparing Cost of Goods Sold Budget Prepare a cost of goods sold budget for the
ID: 2596947 • Letter: P
Question
Preparing Cost of Goods Sold Budget Prepare a cost of goods sold budget for the Crest Hills Manufacturing Co. for the year ended December 31, 2016, from the following estimates. Inventories of production units: Finished Goods $19,300 22,400 January 1, 2016 December 31, 2016 Direct materials purchased during the year, $854,000; beginning inventory of direct materials, $31,000; and ending inventory of direct materials, $26,000. Totals from other budgets included: Direct labor cost $539,500 818,000Explanation / Answer
Crest Hill Manufacturing Co
Cost of Goods Sold Budget for the year ended December 31, 2016
Beginning inventory of direct materials $31,000
Add: Purchases $854,000
Less: Ending inventory of direct materials ($26,000)
Cost of materials issued to production $859,000
Add: Direct labor cost $539,500
Factory overhead costs $818,000
Cost of goods manufactured $2,216,500
Add: Beginning finished goods inventory $19,300
Cost of goods available for sale $2,235,800
Less: Ending finished goods inventory ($22,400)
Cost of goods sold $2,213,400
Hence, cost of goods sold budget for the year ended December 31, 2016 is $2,213,400