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Cornerstone Exercise 8.7 (Algorithmic) Cost of Goods Sold Budget

Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs:

Direct materials	$1.80
Direct labor	0.45
Variable overhead	0.85
Fixed overhead	1.85
Total unit cost	$4.95

For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 282,000 of them. Budgeted beginning inventory in units is 18,000 with unit cost of $4.95. (There are no beginning or ending inventories of work in process.)

Required:

1. Calculate the total budgeted cost of units produced for Play-Disc for the coming year. Show the cost of direct materials, direct labor, and overhead.

Budgeted direct materials	$
Budgeted direct labor
Budgeted overhead
Total budgeted manufacturing cost	$

Hide 2. Prepare a cost of goods sold budget for Play-Disc for the year. Play-Disc Cost of Goods Sold Budget For the Year $ Total manufacturing cost $ Cost of goods sold $

3. What if the beginning inventory of finished goods was $88,200 (for 18,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.) The cost of goods sold would - Select your answer -increase decrease Correct 1 of Item 3 to $

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