Cost of Goods Manufactured
Pietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 50,000 units will be produced, with thefollowing total costs:
| Direct materials | ? |
| Direct labor | $61,000 |
| Variable overhead | 30,000 |
| Fixed overhead | 205,000 |
Next year, Pietro expects to purchase $115,000 of directmaterials. Projected beginning and ending inventories for directmaterials and work in process are as follows:
| Direct materials
Inventory | Work-in-Process
Inventory |
| Beginning | $6,000 | $10,500 |
| Ending | $5,900 | $12,500 |
Required:
1. Prepare a statement of cost of goodsmanufactured.
| Pietro Frozen Foods, Inc. |
| Statement of Cost of Goods Manufactured |
| For the Coming Year |
| Direct materials | | |
| Beginning inventory | $ | |
| | |
| Materials available | $ | |
| | |
| Direct materials used in production | | $ |
| | |
| | |
| Total manufacturing costs added | | $ |
| | |
| | |
| Cost of goods manufactured | | $ |
2. What if the endinginventory of direct materials increased by $2,600? Indicate theaffect that this would have on the items listed below:
| Direction of change | | | Amount |
| Direct materials used | | by | | $ |
| Total manufacturing costs | | by | | $ |
| Cost of goods manufactured | | by | | $ |
