Cost of Goods Sold

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 52,000 units will be produced, with the following total costs:

Direct materials	?
Direct labor	69,000
Variable overhead	22,000
Fixed overhead	195,000

Next year, Pietro expects to purchase $125,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$5,000	$10,000
Ending	$4,900	$12,000

Pietro expects to produce 52,000 units and sell 51,300 units. Beginning inventory of finished goods is $40,500, and ending inventory of finished goods is expected to be $32,000.

Required:

1. Prepare a statement of cost of goods sold in good form.

Pietro Frozen Foods, Inc.
Statement of Cost of Goods Sold
For the Coming Year
	$
	$
	$

2. What if the beginning inventory of finished goods decreased by $3,000? What would be the effect on the cost of goods sold? by $