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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 $