Question

Sleep Tight manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $37,000, $31,000, and $29,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $44,000, $36,000, and $20,000, respectively. Direct material purchases were $560,000, direct labor was $201,000 for the year, and factory overhead was $149,000.

Required:

Prepare a cost of goods sold budget for Sleep Tight, 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 and Amount Descriptions

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

Cost of Goods Sold Budget

Prepare a cost of goods sold budget for Sleep Tight, 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.

Sleep Tight, Inc.

Cost of Goods Sold Budget

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Answer 1

SOLUTION

Sleep Tight, Inc.

Cost of Goods Sold Budget

For the period Ending December 31

	Amount ($)	Amount ($)	Amount ($)
Finished goods inventory, January 1			37,000
Work in process inventory, January 1		31,000
Direct materials inventory, January 1	29,000
Direct materials purchases	560,000
Cost of direct materials available for sale	589,000
Less:Direct materials inventory December 31	(20,000)
Cost of direct materials placed in production	569,000
Direct labor	201,000
Factory overhead	149,000
Total manufacturing costs		919,000
Total work in process during the period		950,000
Less: Work in process inventory, December 31		(36,000)
Costs of good manufactured			914,000
Cost of finished goods available for sale			951,000
Less: Finished goods inventory, December 31			(44,000)
Costs of goods sold			907,000