Cost of Goods Sold Budget

Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs:

Direct materials	$1.65
Direct labor	0.55
Variable overhead	0.70
Fixed overhead	1.95
Total unit cost	$4.85

For the coming year, Play-Disc expects to make 400,000 plastic discs, and to sell 389,000 of them. Budgeted beginning inventory in units is 16,000 with unit cost of $4.85. (There are no beginning or ending inventories of work in process.)

Required:

1. Calculate the total budgeted cost of units produced for Play-Disc for the coming year. Show the cost of direct materials, direct labor, and overhead.

Budgeted direct materials	$fill in the blank 7a67c9086fac078_1
Budgeted direct labor	fill in the blank 7a67c9086fac078_2
Budgeted overhead	fill in the blank 7a67c9086fac078_3
Total budgeted manufacturing cost	$fill in the blank 7a67c9086fac078_4

2. Prepare a cost of goods sold budget for Play-Disc for the year.

Play-Disc
Cost of Goods Sold Budget
For the Year
Direct materials	$fill in the blank 8b4335fd2053f84_2
Direct labor	fill in the blank 8b4335fd2053f84_4
Overhead	fill in the blank 8b4335fd2053f84_6
Total manufacturing cost	$fill in the blank 8b4335fd2053f84_7
Add: Beginning inventory, finished goods	fill in the blank 8b4335fd2053f84_9
Less: Ending inventory, finished goods	fill in the blank 8b4335fd2053f84_11
Cost of goods sold	$fill in the blank 8b4335fd2053f84_12

3. What if the beginning inventory of finished goods was $76,700 (for 16,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.) The cost of goods sold would decrease to $fill in the blank a283fc02e056faf_2.