Cost of Goods Sold Budget

Magnolia Candle Inc. budgeted production of 74,200 candles in 2016. Wax is required to produce a candle. Assume eight ounces (one-half of a pound) of wax is required for each candle. The estimated January 1, 2016, wax inventory is 2,500 pounds. The desired December 31, 2016, wax inventory is 2,100 pounds. Candle wax costs $4.10 per pound.

Each candle requires molding. Assume that 12 minutes are required to mold each candle. Molding labor costs $14.00 per hour.