WKZ Inc., with $20,000,000 of par stock outstanding, plans to budget earnings of 6% before income tax, on this stock. The Marketing Department budgets sales at $12,000,000. The budget director approves the sales budget and expenses as follows:
Marketing .......................... 15% of sales
Administrative .................... 5%
Financial ........................... 1%
Labor is expected to be 50% of the total manufacturing cost; materials issued for the budgeted production will cost $2,500,000; therefore, any savings in manufacturing cost will have to be in factory overhead. Inventories are to be as follows:

Required:
Prepare the budgeted cost of goods manufactured and sold statement, showing the budgeted purchases of materials and the adjustments for inventories of materials, work in process, and finished goods.

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Beginning of Year $800,000 100,000 500,000 End of Year $1,000,000 300,000 600,000 Finished goods Materials..