Prepare a cost of goods sold budget for LifeTyme Publishers Inc., using the information in Practice Exercises 22-3A and 22-4A

Prepare a cost of goods sold budget for LifeTyme Publishers Inc., using the information in Practice Exercises 22-3A and 22-4A. Assume the estimated inventories on January 1, 2014, for finished goods and work in process were $28,000 and $17,000, respectively. Also assume the desired inventories on December 31, 2014, for finished goods and work in process were $23,700 and $19,500, respectively. Factory overhead was budgeted at $205,800.

Answer:


Finished goods inventory, January 1, 2014   $ 28,000 
Work in process inventory, January 1, 2014  $ 17,000  
Direct materials:    
Direct materials inventory, January 1, 2014    
(29,100 × $0.80) $ 23,280   
Direct materials purchases (from PE 22–3A) 1,077,680   
Cost of direct materials available for use $1,100,960   
Less direct materials inventory,    
December 31, 2014 (32,900 × $0.80) 26,320   
Cost of direct materials placed in    
production $1,074,640   
Direct labor (from PE 22–4A) 460,560   
Factory overhead 205,800   
Total manufacturing  costs  1,741,000  
Total work in process during period  $1,758,000  
Less work in process inventory, December 31, 2014  19,500  
Cost of goods manufactured   1,738,500 
Cost of finished goods available for sale   $1,766,500 
Less finished goods inventory, December 31, 2014   23,700 
Cost of goods sold   $1,742,800