Cost of Goods Sold
Pietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 49,400 units will be produced, with thefollowing total costs:
| Direct materials | ? |
| Direct labor | 69,000 |
| Variable overhead | 27,000 |
| Fixed overhead | 240,000 |
Next year, Pietro expects to purchase $124,500 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 | $13,000 |
| Ending | $5,900 | $15,000 |
Pietro expects to produce 49,400 units and sell 48,700 units.Beginning inventory of finished goods is $42,500, and endinginventory of finished goods is expected to be $34,000.
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 |
| $ |
| |
| $ |
| |
| $ |
2. What if thebeginning inventory of finished goods decreased by $5,000? Whatwould be the effect on the cost of goods sold?
by $
