Cost of Goods Sold

Bobs Bistro produces party-sized hoagie sandwiches. For next year, Bobs Bistro predicts that 54,700 units will be produced with the following total costs:

Direct materials?Direct labor$58,000Variable overhead19,000Fixed overhead235,000

Next year, Bobs Bistro expects to purchase $115,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

Direct materials InventoryWork-in-Process InventoryBeginning$5,000$12,700Ending$4,900$14,700

Bobs Bistro expects to produce 54,700 units and sell 54,000 units. Beginning inventory of finished goods is $44,500, and ending inventory of finished goods is expected to be $36,000.

Feedback Check My Work 1. See Example 2.3 2. What if the beginning inventory of finished goods increased by $4,250 ? What would be the effect on the cost of goods sold? by $