Question

cost of goods sold budget

quetzaltenango candle inc. budgeted production of 685,000 candles for march. each candle requires molding. assume that 6 minutes are required to mold each candle. if molding labor costs $15 per hour, determine the direct labor cost budget for march. wax is required to produce a candle. assume 342,000 pounds of material will be purchased during march. the candle wax costs $1.20 per pound.

prepare a cost of goods sold budget for quetzaltenango candle inc. using the information above. assume the estimated inventories on march 1 for finished goods and work in process were $300,000 and $41,250, respectively and direct materials wax inventory of 15,000 pounds. also assume the desired inventories on march 31 for finished goods and work in process were $200,000 and $28,500, respectively and direct materials wax inventory of 14,500 pounds. factory overhead was budgeted at $400,000. for those boxes in which you must enter subtracted or negative numbers use a minus sign.

quetzaltenango candle inc.
cost of goods sold budget
for the month ending march 31

line item description
amount
amount
amount

direct materials:
cost of direct materials placed in production

Explanation:

Calculate direct labor cost

Using the Direct Labor Budget knowledge point

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Calculate direct materials cost

Using the Direct Materials Purchases Budget knowledge point

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Calculate total manufacturing costs

We combine the direct materials, direct labor, and factory overhead costs to find the total manufacturing costs.

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Calculate cost of goods manufactured

We adjust the total manufacturing costs for the work in process inventories.

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Calculate cost of goods sold

We adjust the cost of goods manufactured for the finished goods inventories.

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Answer:

Quetzaltenango Candle Inc.
Cost of Goods Sold Budget
For the Month Ending March 31

Line Item Description	Amount	Amount	Amount
Work in process inventory, March 1		\$41,250
Direct materials:
Direct materials inventory, March 1	\$18,000
Direct materials purchases	410,400
Cost of direct materials available for use	\$428,400
Less direct materials inventory, March 31	-17,400
Cost of direct materials placed in production		\$411,000
Direct labor		1,027,500
Factory overhead		400,000
Total manufacturing costs			\$1,838,500
Total work in process during period			\$1,879,750
Less work in process inventory, March 31			-28,500
Cost of goods manufactured			\$1,851,250
Cost of finished goods available for sale			\$2,151,250
Less finished goods inventory, March 31			-200,000
Cost of goods sold			\$1,951,250