Now prepare the cost of goods sold budget.
Review the sales budget you prepared above.
Review the production budget you prepared above.
(Unless otherwise noted, assume all of the following events occurred during 2024 and that any balances given are stated as of December 31, 2024.) a. Budgeted sales are 1,500 sets for the first quarter and expected to increase by 50 sets per quarter. Cash sales are expected to be 20% of total sales, with the remaining 80% of sales on account. Sets are budgeted to sell for $90 per set. b. Finished Goods Inventory on December 31, 2024, consists of 550 sets at $35 each. c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2026 are expected to be 1,700 sets. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2024, consists of 3,300 pounds. Direct materials requirement is six pounds per set. The cost is $1 per pound. e. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31,2025 , is 3,300 pounds; indirect materials are insignificant and not considered for budgeting purposes. f. Each set requires 0.20 hours of direct labor; direct labor costs average 10 per hour. g. Variable manufacturing overhead is $2.00 per set. h. Fixed manufacturing overhead includes $2,000 per quarter in depreciation and $8,642 per quarter for other costs, such as utilities, insurance, and property taxes. i. Fixed selling and administrative expenses include $10,000 per quarter for salaries; $3,600 per quarter for rent; $900 per quarter for insurance; and $1,500 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 2% of sales. k. Capital expenditures include $40,000 for new manufacturing equipment, to be purchased and paid for in the first quarter. I. Cash receipts for sales on account are 60% in the quarter of the sale and 40% in the quarter following the sale; Accounts Receivable balance on December 31, 2024, is expected to be received in the first quarter of 2025; uncollectible accounts are considered insignificant and not considered for budgeting purposes. m. Direct materials purchases are paid 70% in the quarter purchased and 30% in the following quarter; Accounts Payable balance on December 31, 2024, is expected to be paid in the first quarter of 2025. n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. o. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. Data table The Taylor Toy Company manufactures toy building block sets for children. Taylor is planning for 2025 by developing a master b Sales Budget (Cick the icon to view the balance sheet.) Other budget datas for Taylar Tay Company: (Cllok the loon to view the other data.) Read the requirements. Before preparing the cost of goods sold bucget, calculate the projected manufacturing cost per set for 2025 . (Round all amounts Production Budget Now prepare the cost of goods sold budgat. Review the siales budget you prepired iabere. Review the croduction budget you prepared above
