Cost of Goods Sold

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 49,400 units will be produced, with the following total costs:

Direct materials	?
Direct labor	69,000
Variable overhead	27,000
Fixed overhead	240,000

Next year, Pietro expects to purchase $124,500 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	$6,000	$13,000
Ending	$5,900	$15,000

Pietro expects to produce 49,400 units and sell 48,700 units. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be $34,000.

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 $5,000? What would be the effect on the cost of goods sold? by $