From the following details provided by Barry, Inc, prepare the cost of goods sold budget for the year

Question

Direct materials per unit $65
Direct labor hours per unit 2 hours
Direct labor rate per hour $50
Manufacturing overhead cost per direct labor hour $20
Beginning inventory units 1,000
Sales price per unit $250

First Second Third Fourth
Quarter Quarter Quarter Quarter

Units expected to be sold: 15,000 18,000 21,000 24,000
Barry, Inc expects no inventory units at the end of the second, third and fourth quarters.

What will be an ideal response

Answer 1

Barry, Inc.
Cost of Goods Sold Budget
For the Year Ended December 31, 20XX

First Second Third Fourth
Quarter Quarter Quarter Quarter
Beginning inventory (1,000 units)* $205,000
Units produced and sold in 20XX
@ $205 each 2,870,000 $3,690,000 $4,305,000 $4,920,000
(15,000**, 18,000, 21,000, 24,000
units per quarter) _________ _________ _________ _________
Total budgeted cost of goods
sold $3,075,000 $3,690,000 $4,305,000 $4,920,000

*Calculation of cost of beginning inventory:

Direct materials cost per unit $65
Direct labor cost per unit (2 DLHr per unit x $50 ) $100
Manufacturing overhead cost per unit (2 DLHr per unit x $20 per DLHr) $40
Total projected manufacturing cost per unit for 20XX $205
Beginning inventory units x 1,000
Cost of beginning inventory ($205 x 1,000 ) $205,000

** First Quarter - 14,000 produced; 15,000 units sold