Cost of Goods SoldPietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts...Cost...

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Accounting

Cost of Goods Sold
Pietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 49,100 units will be produced, with thefollowing total costs:
Direct materials ?
Direct labor 53,000
Variable overhead 25,000
Fixed overhead 185,000
Next year, Pietro expects to purchase $128,000 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 $14,000
Ending $5,900 $16,000
Pietro expects to produce 49,100 units and sell 48,400 units.Beginning inventory of finished goods is $47,500, and endinginventory of finished goods is expected to be $39,000.
Required:
1. Prepare a statement of cost of goods sold in good form.
Pietro Frozen Foods, Inc.
Statement of Cost of Goods Sold
For the Coming Year
$

$

$
2. What if the beginning inventory of finished goods decreasedby $3,750? What would be the effect on the cost of goodssold?
by $

Answer & Explanation Solved by verified expert

4.1 Ratings (642 Votes)

Solution 1:

Pietro Frozen Food Inc.
Statement of Cost of goods sold
Particulars		Amount
Direct material consumed:
Beginning material inventory	$6,000.00
Add: Purchases	$128,000.00
Less: Ending material inventory	$5,900.00
Direct material consumed		$128,100.00
Direct labor		$53,000.00
Variable manufacturing overhead		$25,000.00
Fixed manufacturing overhead		$185,000.00
Manufacturing cost incurred during the period		$391,100.00
Add: Beginning Work in Process		$14,000.00
Less: Ending Work in Process		$16,000.00
Cost of goods manufactured		$389,100.00
Add: Beginning finished goods inventory		$47,500.00
Cost of goods available for sale		$436,600.00
Less: Ending finished goods inventory		$39,000.00
Cost of goods sold		$397,600.00

Solution 2:

If beginning finished goods inventory decrease by $3,750 then cost of goods sold also decreases by $3,750.

Revised cost of goods sold = $397,600 - $3,750 = $393,850

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In: AccountingCost of Goods SoldPietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts...Cost of Goods SoldPietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 49,100 units will be produced, with thefollowing total costs:Direct materials ?Direct labor 53,000Variable overhead 25,000Fixed overhead 185,000Next year, Pietro expects to purchase $128,000 of directmaterials. Projected beginning and ending inventories for directmaterials and work in process are as follows:Direct materialsInventory Work-in-ProcessInventoryBeginning $6,000 $14,000Ending $5,900 $16,000Pietro expects to produce 49,100 units and sell 48,400 units.Beginning inventory of finished goods is $47,500, and endinginventory of finished goods is expected to be $39,000.Required:1. Prepare a statement of cost of goods sold in good form.Pietro Frozen Foods, Inc.Statement of Cost of Goods SoldFor the Coming Year$$$2. What if the beginning inventory of finished goods decreasedby $3,750? What would be the effect on the cost of goodssold? by $