Cost of Goods Sold

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 55,200 units will be produced, with the following total costs:

Direct materials	?
Direct labor	66,000
Variable overhead	18,000
Fixed overhead	240,000

Next year, Pietro expects to purchase $128,500 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	$11,800
Ending	$4,900	$13,800

Pietro expects to produce 55,200 units and sell 54,500 units. Beginning inventory of finished goods is $39,500, and ending inventory of finished goods is expected to be $31,000.

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
	$fill in the blank aa8c9ffe3036029_2
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	$fill in the blank aa8c9ffe3036029_6
	fill in the blank aa8c9ffe3036029_8
	$fill in the blank aa8c9ffe3036029_10

2. What if the beginning inventory of finished goods decreased by $3,500? What would be the effect on the cost of goods sold?