Obj. Example Exercise 22-5 cost of Goods Sold Budget Prepare a cost of goods sold budget for Landon Awards Co. using the information in Example Exercises 22-3 and 22-4 Assume that the estimated inventories on January 1, 2045, for finished goods and work in process were $54,000 and 547,000, respectively. Also assume that the desired inventories on December 31, 2015. for finished goods and work in process were $50,000 and $49,000, respectively, Factory overhead was budgeted for $126,000. Continued) $ 54,000 $ 47,000 $ 28,800 536,640 5565,440 Follow My Example 22-5 Finished goods inventory, January 1, 2015 Work in process inventory, January 1, 2015. Direct materials: Direct materials inventory, January 1, 2045 (240,000 $0.12 from EE 22-3) Direct materials purchases (from EE 22-3) Cost of direct materials available for use Less direct materials inventory, December 31, 2045 (200,000 x $0.12, from EE 22-3)... Cost of direct materials placed in production Direct labor (from EE 22-4) Factory overhead Total manufacturing costs. Total work in process during period. Less work in process inventory, December 31, 2015 Cost of goods manufactured. Cost of finished goods available for sale Less finished goods inventory, December 31, 2045 Cost of goods sold. 24,000 $541.446 103.400 126,000 770,840 $817840 49,000 768,840 $822,840 50,000 37727840 Practice Exercises: PE 22-5A, PE 22-58 PE 22-5B Cost of goods sold budget 4 Prepare a cost of goods sold budget for Magnolia Candle Inc. using the information in Practice Exercises 22-35 and 22.48. Assume that the estimated inventories on January 1, 2014, for finished goods and work in process were $9,800 and $3,600, respectively. Also assume that the desired inventories on December 31, 20Y4, for finished goods and work in process were $12 900 and $3,500, respectively. Factory overhead was budgeted at $109,000 Example Exercise 22-3 Direct Materials Purchases Budget obj. 4 Landon Awards Co. budgeted production of 47,000 brass plaques in 2015. Brass sheet is required to produce a brass plaque. Assume that 96 square inches of brass sheet are required for each brass plaque. The estimated January 1, 2015, brass sheet inventory is 240,000 square inches. The desired December 31, 2045, brass sheet inventory is 200,000 square inches. If brass sheet costs $0.12 per square inch, determine the direct materials purchases budget for 20Y5. Follow My Example 22-3 Square inches required for production: Brass sheet (47,000 x 96 sq. in.).... 4,512,000 Plus desired ending inventory, December 31, 2045..... 200,000 Total square inches required....... 4,712,000 Less estimated beginning inventory, January 1, 2045 240,000 Total square inches to be purchased. 4,472,000 Unit price (per square inch)..... X $0.12 Total direct materials to be purchased.. $ 536,640 Practice Exercises: PE 22-3A, PE 22-3B Example Exercise 22-4 Direct Labor Cost Budget Obj. 4 Landon Awards Co. budgeted production of 47,000 brass plaques in 2015. Each plaque requires engraving. Assume that 12 minutes are required to engrave each plaque. If engraving labor costs $11.00 per hour, determine the direct labor cost budget for 2045 Follow My Example 22-4 Hours required for engraving: Brass plaque (47,000 x 12 min.). 564,000 min Convert minutes to hours 60 min Engraving hours. 9,400 hrs. Hourly rate * $11.00 Total direct labor cost. $10,400 Practice Exercises: PE 22-4A, PE 22-48 Obj. Example Exercise 22-5 cost of Goods Sold Budget Prepare a cost of goods sold budget for Landon Awards Co. using the information in Example Exercises 22-3 and 22-4 Assume that the estimated inventories on January 1, 2045, for finished goods and work in process were $54,000 and 547,000, respectively. Also assume that the desired inventories on December 31, 2015. for finished goods and work in process were $50,000 and $49,000, respectively, Factory overhead was budgeted for $126,000. Continued) $ 54,000 $ 47,000 $ 28,800 536,640 5565,440 Follow My Example 22-5 Finished goods inventory, January 1, 2015 Work in process inventory, January 1, 2015. Direct materials: Direct materials inventory, January 1, 2045 (240,000 $0.12 from EE 22-3) Direct materials purchases (from EE 22-3) Cost of direct materials available for use Less direct materials inventory, December 31, 2045 (200,000 x $0.12, from EE 22-3)... Cost of direct materials placed in production Direct labor (from EE 22-4) Factory overhead Total manufacturing costs. Total work in process during period. Less work in process inventory, December 31, 2015 Cost of goods manufactured. Cost of finished goods available for sale Less finished goods inventory, December 31, 2045 Cost of goods sold. 24,000 $541.446 103.400 126,000 770,840 $817840 49,000 768,840 $822,840 50,000 37727840 Practice Exercises: PE 22-5A, PE 22-58 PE 22-5B Cost of goods sold budget 4 Prepare a cost of goods sold budget for Magnolia Candle Inc. using the information in Practice Exercises 22-35 and 22.48. Assume that the estimated inventories on January 1, 2014, for finished goods and work in process were $9,800 and $3,600, respectively. Also assume that the desired inventories on December 31, 20Y4, for finished goods and work in process were $12 900 and $3,500, respectively. Factory overhead was budgeted at $109,000 Example Exercise 22-3 Direct Materials Purchases Budget obj. 4 Landon Awards Co. budgeted production of 47,000 brass plaques in 2015. Brass sheet is required to produce a brass plaque. Assume that 96 square inches of brass sheet are required for each brass plaque. The estimated January 1, 2015, brass sheet inventory is 240,000 square inches. The desired December 31, 2045, brass sheet inventory is 200,000 square inches. If brass sheet costs $0.12 per square inch, determine the direct materials purchases budget for 20Y5. Follow My Example 22-3 Square inches required for production: Brass sheet (47,000 x 96 sq. in.).... 4,512,000 Plus desired ending inventory, December 31, 2045..... 200,000 Total square inches required....... 4,712,000 Less estimated beginning inventory, January 1, 2045 240,000 Total square inches to be purchased. 4,472,000 Unit price (per square inch)..... X $0.12 Total direct materials to be purchased.. $ 536,640 Practice Exercises: PE 22-3A, PE 22-3B Example Exercise 22-4 Direct Labor Cost Budget Obj. 4 Landon Awards Co. budgeted production of 47,000 brass plaques in 2015. Each plaque requires engraving. Assume that 12 minutes are required to engrave each plaque. If engraving labor costs $11.00 per hour, determine the direct labor cost budget for 2045 Follow My Example 22-4 Hours required for engraving: Brass plaque (47,000 x 12 min.). 564,000 min Convert minutes to hours 60 min Engraving hours. 9,400 hrs. Hourly rate * $11.00 Total direct labor cost. $10,400 Practice Exercises: PE 22-4A, PE 22-48