Prepare a cost of goods sold budget for Magnolia Candle Co., using the information in Practice Exercises 22-3B and 22-4B

Prepare a cost of goods sold budget for Magnolia Candle Co., using the information in Practice Exercises 22-3B and 22-4B. Assume the estimated inventories on January 1, 2014, for finished goods and work in process were $9,800 and $3,600, respectively. Also assume the desired inventories on December 31, 2014, for finished goods and work in process were $12,900 and $3,500, respectively. Factory overhead was budgeted at $109,600.

Answer:

Finished goods inventory, January 1, 2014   $ 9,800 

Work in process inventory, January 1, 2014  $ 3,600  

Direct materials:    

Direct materials inventory, January 1, 2014    

(2,500 × $4.10) $  10,250   

Direct materials purchases (from PE 22–3B) 150,470   

Cost of direct materials available for use $160,720   

Less direct materials inventory,    

December 31, 2014 (2,100 × $4.10) 8,610   

Cost of direct materials placed in    

production $152,110   

Direct labor (from PE 22–4B) 207,760   

Factory overhead 109,600   

Total manufacturing costs  469,470  

Total work in process during period  $473,070  

Less work in process inventory, December 31, 2014  3,500  

Cost of goods manufactured   469,570 

Cost of finished goods available for sale   $479,370 

Less finished goods inventory, December 31, 2014   12,900 

Cost of goods sold   $466,470