Cost of Goods Sold Budget

The cost of goods sold budget integrates the direct materials purchases budget, direct labor cost budget, and factory overhead cost budget. Estimated and desired inventories for direct materials, work in process, and finished goods must also be integrated into the cost of goods sold budget.

Complete the preparation of the cost of goods sold budget for LearnCo, using information that follows provided by the controller, and using the previous budgets you have prepared.

LearnCo Cost of Goods Sold Budget For the Year Ending December 31, 20Y2
Finished goods inventory, January 1, 20Y2			$9,870
Work in process inventory, January 1, 20Y2		$2,010
Direct materials:
Direct materials inventory, January 1, 20Y2	$1,600
Direct materials purchases	fill in the blank 2ca3a3fadfd0fe1_1
Cost of direct materials available for use	$fill in the blank 2ca3a3fadfd0fe1_2
Direct materials inventory, December 31, 20Y2	(1,440)
Cost of direct materials placed in production	$fill in the blank 2ca3a3fadfd0fe1_3
Direct labor	fill in the blank 2ca3a3fadfd0fe1_4
Factory overhead	fill in the blank 2ca3a3fadfd0fe1_5
Total manufacturing costs		fill in the blank 2ca3a3fadfd0fe1_6
Total work in process during period		$fill in the blank 2ca3a3fadfd0fe1_7
Work in process inventory, December 31, 20Y2		(1,250)
Cost of goods manufactured			fill in the blank 2ca3a3fadfd0fe1_8
Cost of finished goods available for sale			$fill in the blank 2ca3a3fadfd0fe1_9
Finished goods inventory, December 31, 20Y2			(1,500)
Cost of goods sold			$fill in the blank 2ca3a3fadfd0fe1_10

Selling/Admin. Expenses Budget

The sales budget is often used as the starting point for the selling and administrative expenses budget. For example, a budgeted increase in sales may require more advertising expenses. LearnCo has prepared its selling and administrative expenses budget as follows. This budget is merely reviewed by you for use on the budgeted income statement.

LearnCo Selling and Administrative Expenses Budget For the Year Ending December 31, 20Y2
Selling expenses:
Sales salaries expense	$45,000
Advertising expense	15,000
Travel expense	5,400
Total selling expenses		$65,400
Administrative expenses:
Officers' salaries expense	$85,000
Office salaries expense	35,000
Office rent expense	26,000
Office supplies expense	6,400
Miscellaneous administrative expenses	1,600
Total administrative expenses		154,000
Total selling and administrative expenses		$219,400

Budgeted Income Statement

The budgeted income statement is prepared by integrating the sales budget, cost of goods sold budget, and selling and administrative expenses budget. Additional information that may be helpful in preparing the budgeted income statement are on the following Budgeted Income Statement Data Table.

Review the Budgeted Income Statement Data Table, then complete the budgeted income statement that follows the table. Round the computed amount for income tax to the nearest whole dollar.

Budgeted Income Statement Data Table
Interest revenue for the year	$2,000
Interest expense for the year	$1,500
LearnCos income tax rate	40%

LearnCo Budgeted Income Statement For the Year Ending December 31, 20Y2
Revenue from sales		$fill in the blank 472f24fbc00a045_1
Cost of goods sold		fill in the blank 472f24fbc00a045_2
Gross profit		$fill in the blank 472f24fbc00a045_3
Selling and administrative expenses:
Selling expenses	$fill in the blank 472f24fbc00a045_4
Administrative expenses	fill in the blank 472f24fbc00a045_5
Total selling and administrative expenses		fill in the blank 472f24fbc00a045_6
Operating income		$fill in the blank 472f24fbc00a045_7
Other revenue and expense:
Interest revenue	$fill in the blank 472f24fbc00a045_8
Interest expense	fill in the blank 472f24fbc00a045_9	fill in the blank 472f24fbc00a045_10
Income before income tax		$fill in the blank 472f24fbc00a045_11
Income tax		fill in the blank 472f24fbc00a045_12
Net income		$fill in the blank 472f24fbc00a045_13