Question
Cost of Goods Sold Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 52,500 units will be produced, with the following
Cost of Goods Sold Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 52,500 units will be produced, with the following total costs: Direct materials? Direct labor 66,000 Variable overhead 18,000 Fixed overhead 245,000 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 $7,000 $13,900 Ending $6,900 $15,900 Pietro expects to produce 52,500 units and sell 51,800 units. The beginning inventory of finished goods is $43,500, and the ending inventory of finished goods is expected to be $35,000.
1. Prepare a statement of cost of goods sold in good form.
2. What if the beginning inventory of finished goods decreased by $3,000? What would be the effect on the cost of goods sold?
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