Preparing a Cost of Goods Sold Budget 1.9 direct labor hours at Andrews Company manufactures a line of office chairs. Each chair takes $14 of direct materials and uses 16 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour, and the fixed overhead rate is $1.60 per direct labor hour. Andrews expects to produce 20,000 chairs next year and expects to have 675 chairs in ending inventory. There is no beginning inventory of office chairs. Required: Prepare a cost of goods sold budget for Andrews Company. Andrews Company Cost of Goods Sold Budget For the Coming Year Direct materials Direct labor Variable overhead Fixed overhead Total manufacturing cost Less: Ending inventory Cost of goods sold