Question

Good Night, Inc. manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $51,000, $28,000, and $33,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $48,000, $35,000, and $29,000, respectively. Direct materials purchases were $555,000. Direct labor was $252,000 for the year. Factory overhead was $176,000.

Required:

Prepare a cost of goods sold budget for Good Night, Inc. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Be sure to complete the statement heading.

Labels
For the Year Ending December 31
Direct materials
Amount Descriptions
Cost of direct materials placed in production
Cost of finished goods available for sale
Cost of direct materials available for use
Costs of good manufactured
Costs of goods sold
Direct labor
Direct materials inventory, December 31
Direct materials inventory, January 1
Direct materials purchases
Factory overhead
Finished goods inventory, December 31
Finished goods inventory, January 1
Total manufacturing costs
Total work in process during the period
Work in process inventory, December 31
Work in process inventory, January 1

Prepare a cost of goods sold budget for Good Night, Inc. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Be sure to complete the statement heading.

Good Night, Inc.

Cost of Goods Sold Budget

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Answer 1

Good Night, Inc Cost of Goods Sold Budget For Year Ending December 31
Direct material inventory, January 1	$33,000
Plus: Direct material purchases	555,000
Cost of direct material available for use	588,000
Less: Direct material inventory, December 31	(29,000)
Cost of direct materials placed in production		$559,000
Direct labor		252,000
Factory overhead		176,000
Total manufacturing costs			$987,000
Plus: Work in process inventory, January 1			28,000
Total work in process during the period			1,015,000
Less: Work in process inventory, December 31			35,000
Cost of goods manufactured				$980,000
Plus: Finished goods inventory, January 1				51,000
Cost of finished goods available for sale				1,031,000
Less: Finished goods inventory, December 31				48,000
Cost of goods sold				$983,000