THE COSTS
COST OF GOODS SOLD BUDGET


If you want to share this website
with your friends, classmates or family, click here
 


 LINKS 
  • Financial Information
  • Accounting Systems
  • Introduction to Cost Accounting
  • Cost definition
  • Use of Costs
  • Classification of Costs
  • Inventory Valuation
  • Costs Behavior
  • Cost Accounting Systems
  • Standard Costs and Variances
  • Cost-Volume-Profit Analysis
  • Break-Even Point
  • Target Profit
  • Budgeting
  • Master Budget
  • Activity Based Costing (ABC)
  • Transfer Prices
  • Accounting Profession & Ethics
  • Accounting Equation
  • Financial Statements
  • Financial Statement Reporting
  • Accounts, Debits & Credits
  • The Journal
  • The General Ledger
  • The Trial Balance
  • "T" Accounts
  • Income Measurement

  • Home
    Bibliography
    Contact

    Interesting Articles

    The Art of Negotiation


    Locations of visitors to this page

    Send your article to:

    asr5@loscostos.info
      If you want your article to be published, it should the following:
    - Relationship of the article with Cost Accounting
    - Article source

    The articles will be published only if they  meet the prerequisites of quality and information.
            The Direct Material Purchases Budget, Direct Labor Cost Budget, and Factory Overhead Cost Budget are the starting point for preparing the Cost of Goods Sold Budget. The desired ending inventory and the estimated beggining inventory data are combined with these data to determine the budgeted cost of goods sold.
            To illustrate, an example of a cost of goods sold for the company Colt Manufacturing, Inc. is shown in the following table and is based on the following work in process and finished goods inventories:

               Estimated inventories on January 1, 2008:                        Desired inventories on December 31, 2008:
                    Finished goods      $1,095,600                                                  Finished goods        $1,565,000
                    Work in process      $214,400                                                   Work in process        $220,000

    Colt Manufacturing, Inc.
      Cost of Goods Sold Budget
    For the Year Ending December 31, 2008
                                                                                                     .



    Finished goods inventory, January 1, 2008


    1,095,600
    Work in process inventory,January 1, 2008.

    214,200

    Direct materials:



          Direct materials inventory,



               January 1, 2008 (Note A)
    99,000


          Direct materials purchases (from Direct Materials budget)
    2,587,500


          



          Cost of direct materials available for use
    2,686,500


          Less direct materials inventory



               December 31, 2008 (Note B)
    104,400


          Cost of direct materials placed in production
    2,582,100


    Direct labor (from Direct Labor budget)
    4,851,600






    Factory overhead (from Overhead budget)
    2,089,080






    Total manufacturing costs

    9,522,780

    Total work in process during period

    9,737,180

    Less work in process inventory,



          December 31, 2008

    220,000

    Cost of goods manufactured


    9,517,180
    Cost of finished goods available for sale


    10,612,780
    Less finished goods inventory,



          December 31, 2008


    1,565,000
    Cost of goods sold


    $9,047,780

        

                                     NOTE A:    Leather:          18,000 sq. yds.  X  $4.50 per sq. yd.  $81,000
                                                        Lining:             15,000 sq. yds.  X  $1.20 per sq. yd.  $18,000
                                                                Direct materials inventory,
                                                                                                 January 1, 2008                $99,000

                                     NOTE B:     Leather:          20,000 sq. yds.  X $4.50 per sq. yd.   $90,000

                                                         Lining:             12,000 sq. yds.  X $1.20 per sq. yd.  $14,400
                                                                Direct materials inventory,
                                                                                             December 31, 2008              $104,400



    ACCOUNTING FORUM

    Free Stuff: Wallpapers -Screensavers --Games VideosEmoticonsClipartIconsMyspaceTattoos - Templates
     
    Paged created by Alfonso Salinas
      All rights reserved. Copyright ©