Asked by Chasity Fields on May 21, 2024
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Sleep Tight, Inc., manufactures comforters. The estimated inventories on January 1 for finished goods, work in process, and materials were $39,000, $33,000, and $27,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $42,000, $35,000, and $21,000, respectively. Direct materials purchases were $575,000, direct labor was $212,000 for the year, and factory overhead was $156,000. Prepare a cost of goods sold budget for Sleep Tight, Inc.
Cost Of Goods Sold Budget
A budget of the estimated direct materials, direct labor, and factory overhead consumed by sold products.
Direct Materials
Direct materials are raw materials that are directly attributable and allocable to a finished good or product being manufactured.
Factory Overhead
The indirect costs associated with running a manufacturing operation, including costs like utilities, maintenance, and depreciation of factory equipment.
- Understand the process and significance of preparing a cost of goods sold budget.
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Learning Objectives
- Understand the process and significance of preparing a cost of goods sold budget.
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