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	$1.70
Direct labor	0.55
Variable overhead	0.85
Fixed overhead	1.85
Total unit cost	$4.95

For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 286,000 of them. Budgeted beginning inventory in units is 20,000 with unit cost of $4.95. (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 510,000 Budgeted direct labor 165,000 Budgeted overhead 255,000 X Total budgeted manufacturing cost $ 930,000 x Feedback 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 510,000 Direct labor 165,000 Overhead 255,000 X A 930,000 X Total manufacturing cost Add: Beginning inventory, finished goods 99,000 Less: Ending inventory, finished goods 34,000 X Cost of goods sold $ 1,063,000 X 3. What if the beginning inventory of finished goods was $98,400 (for 20,000 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 $ 1,063,000 X