Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs:

Direct materials	$1.75
Direct labor	0.50
Variable overhead	0.85
Fixed overhead	1.90
Total unit cost	$5.00

For the coming year, Play-Disc expects to make 400,000 plastic discs, and to sell 380,000 of them. Budgeted beginning inventory in units is 17,000 with unit cost of $5.00. (There are no beginning or ending inventories of work in process.)

Required:

Question Content Area

1. Calculate the total budgeted cost of units produced for Play-Disc for the coming year. Show the cost of direct materials, direct labor, and overhead.

Budgeted direct materials	700,000
Budgeted direct labor	200,000
Budgeted overhead	1,100,000
Total budgeted manufacturing cost	2,000,000

2. Prepare a cost of goods sold budget for Play-Disc for the year.

Play-Disc Cost of Goods Sold Budget For the Year

Direct Materials
Overhead
Total manufacturing cost
Add: Beginning inventory, finished goods
Less: Ending inventory, finished goods
Cost of goods sold

3. What if the beginning inventory of finished goods was $84,100 (for 17,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.) The cost of goods sold would decrease by $