Cost of goods sold budget Pasadena Candle Inc. budgeted production of 785,000 candles for January. Each candle requires molding. Assume that six minutes are required to mold each candle. If molding labor costs $18 per hour, determine the direct labor cost budget for January, Wax is required to produce a candle. Assume 487,125 pounds of material will be purchased during January. The candle wax costs $1.24 per pound. Prepare a cost of goods sold budget for Pasadena Candle Inc. using the information above. Assume the estimated inventories on January 1 for finished goods and work in process were $200,000 and $41,250, respectively and direct materials wax inventory of 16,000 pounds. Also assume the desired inventories on January 31 for finished goods and work in process were $120,000 and $28,500, respectively and direct materials wax inventory of 12,500 pounds. Factory overhead was budgeted at $300,000. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Pasadena Candle Inc. Cost of Goods Sold Budget For the Month Ending January 31 Finished goods inventory, January 1 $ 200,000 Work in process inventory, January 1 41,250 Direct materials: Direct materials inventory, January 1 - 19,840 Direct materials purchases 604,035 Cost of direct materials available for use 623,875 Direct materials inventory, January 31 15,500 x 608,375 Cost of direct materials placed in production Direct labor 1,413,000 Factory overhead 300,000 Total manufacturing costs 2,321,375 2,362,625 28,500 x 234,125 x Total work in process during period Work in process inventory, January 31 Cost of goods manufactured Cost of finished goods available for sale Finished goods inventory, January 31 Cost of goods sold 2,534,125 120,000 X 2,414,125 Direct Materials Purchases Budget Anticipated sales for Safety Grip Company were 65,000 passenger car tires and 20,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires as follows: Passenger Car Truck Rubber 32 lbs. per unit 75 lbs. per unit Steel belts 6 lbs. per unit 15 lbs. per unit The purchase prices of rubber and steel are $3.40 and $4.50 per pound, respectively. The desired ending inventories of rubber and steel belts are 61,000 and 13,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 72,000 and 11,000 pounds, respectively. Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 2049. Safety Grip Company Direct Materials Purchases Budget For the Year Ending December 31, 2019 Rubber Steel Belts Total Pounds required for production: Passenger tires 208,000 X lbs. 390,000 lbs. Truck tires 1,500,000 300,000 Desired inventory, December 31, 2019 3.580,000 X 690,000 X inc Total pounds available 61,000 X lbs. 13,000 X lbs. Desired inventory, January 1, 2049 X 72,000 11,000 Total units purchased 692,000 lbs 3.569,000 lbs. 34 Unit price x $ 4.5 Total direct materials to be purchased 12,134,600 3,114,000 15,248,600
