Preparing a Cost of Goods Sold Budget Andrews Company manufactures a line of office chairs. Each chair takes $14 of direct materials and uses 1.9 direct labor hours at $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 280,000 Direct labor 532,000X Variable overhead 45,600 Fixed overhead 68,400X Total manufacturing cost 926,000X Less: Ending inventory X 46.3 Cost of goods sold 892,201 X