Question
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 $1.75 Direct labor
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 | $1.75 |
Direct labor | 0.45 |
Variable overhead | 0.85 |
Fixed overhead | 1.85 |
Total unit cost | $4.90 |
For the coming year, Play-Disc expects to make 400,000 plastic discs, and to sell 388,000 of them. Budgeted beginning inventory in units is 18,000 with unit cost of $4.90. (There are no beginning or ending inventories of work in process.)
Required:
Question Content Area
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 | |
Budgeted direct labor | |
Budgeted overhead | |
Total budgeted manufacturing cost |
Question Content Area
2. Prepare a cost of goods sold budget for Play-Disc for the year.
Beginning inventory OR Cost of goods sold OR Direct materials OR Ending inventory OR Finished goods | |
Beginning inventory OR Cost of goods sold OR Direct labor OR Ending inventory OR Finished goods | |
Beginning inventory, finished goods OR Cost of goods finished OR Cost of goods sold OR Ending inventory, finished goods OR Overhead | |
Total manufacturing cost | |
Add: Beginning inventory, finished goods OR Add: Cost of goods manufactured OR Add: Cost of goods sold OR Less: Beginning inventory, finished goods | |
Add: Cost of goods manufactured OR Less: Beginning inventory, finished goods OR Less: Cost of goods sold OR Less: Ending inventory, finished goods | |
Cost of goods sold |
Question Content Area
3. What if the beginning inventory of finished goods was $87,400 (for 18,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.) The cost of goods sold would
increase OR decrease to $
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