Cost of Goods Manufactured Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs: Direct materials ? Direct labor $66,000 Variable overhead 26,000 Fixed overhead 200,000 Next year, Pietro expects to purchase $119,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct materials Work-in-Process Inventory Inventory Beginning $5,000 $12,000 Ending $4,900 $14,000 1. Prepare a statement of cost of goods manufactured. Pietro Frozen Foods, Inc. Statement of Cost of Goods Manufactured For the Coming Year Direct materials Beginning inventory 5,000 Add: Purchases 119,500 Materials available 124,500 Less: Ending inventory 4,900 Direct materials used in production Direct labor Manufacturing (Factory) overhead Total manufacturing costs added Add: Beginning work in process Less: Ending work in process 119,600 66,000 226,000 411,600 12,000 14,000 Cost of goods manufactured 409,600 Feedback 2. What if the ending inventory of direct materials increased by $2,300? Indicate the affect that this would have on the items listed below: Direction of change Amount Direct materials used decrease by $ 121,900 X Total manufacturing costs decrease by $ 413,900 X Cost of goods manufactured decrease by $ 411,900 X