Cost of Goods Sold
Pietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 54,200 units will be produced, with thefollowing total costs:
| Direct materials | ? |
| Direct labor | 71,000 |
| Variable overhead | 24,000 |
| Fixed overhead | 245,000 |
Next year, Pietro expects to purchase $116,000 of directmaterials. Projected beginning and ending inventories for directmaterials and work in process are as follows:
| Direct materials
Inventory | Work-in-Process
Inventory |
| Beginning | $7,000 | $11,900 |
| Ending | $6,900 | $13,900 |
Pietro expects to produce 54,200 units and sell 53,500 units.Beginning inventory of finished goods is $39,500, and endinginventory of finished goods is expected to be $31,000.
Required:
1. Prepare a statement of cost of goods sold ingood form.
| Pietro Frozen Foods, Inc. |
| Statement of Cost of Goods Sold |
| For the Coming Year |
- Cost of goods available for sale
- Cost of goods manufactured
- Cost of goods sold
- Ending finished goods
| $ |
- Add: Beginning finished goods
- Add: Cost of goods available for sale
- Add: Cost of goods sold
- Add: Ending finished goods
| |
- Cost of goods available for sale
- Cost of goods manufactured
- Cost of goods sold
- Ending finished goods
| $ |
- Less: Beginning finished goods
- Less: Cost of goods manufactured
- Less: Cost of goods sold
- Less: Ending finished goods
| |
- Beginning finished goods
- Cost of goods manufactured
- Cost of goods sold
- Ending finished goods
| $ |
2. What if thebeginning inventory of finished goods decreased by $3,000? Whatwould be the effect on the cost of goods sold?
- increase
- decrease
- no change
by $
