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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	$1.75
Direct labor	0.45
Variable overhead	0.85
Fixed overhead	1.85
Total unit cost	$4.90

For the coming year, Play-Disc expects to make 400,000 plastic discs, and to sell 388,000 of them. Budgeted beginning inventory in units is 18,000 with unit cost of $4.90. (There are no beginning or ending inventories of work in process.)

Required:

Question Content Area

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

Question Content Area

2. Prepare a cost of goods sold budget for Play-Disc for the year.

Play-Disc Cost of Goods Sold Budget For the Year

Beginning inventory OR Cost of goods sold OR Direct materials OR Ending inventory OR Finished goods
Beginning inventory OR Cost of goods sold OR Direct labor OR Ending inventory OR Finished goods
Beginning inventory, finished goods OR Cost of goods finished OR Cost of goods sold OR Ending inventory, finished goods OR Overhead
Total manufacturing cost
Add: Beginning inventory, finished goods OR Add: Cost of goods manufactured OR Add: Cost of goods sold OR Less: Beginning inventory, finished goods
Add: Cost of goods manufactured OR Less: Beginning inventory, finished goods OR Less: Cost of goods sold OR Less: Ending inventory, finished goods
Cost of goods sold

Question Content Area

3. What if the beginning inventory of finished goods was $87,400 (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

increase OR decrease to $

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