Question

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,200 units will be produced, with the following total costs:

Direct materials	?
Direct labor	70,000
Variable overhead	28,000
Fixed overhead	235,000

Next year, Pietro expects to purchase $117,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$5,000	$12,700
Ending	$4,900	$14,700

Pietro expects to produce 50,200 units and sell 49,500 units. Beginning inventory of finished goods is $43,500, and ending inventory of finished goods is expected to be $35,000.

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
Cost of goods manufactured	$
Add: Beginning finished goods
Cost of goods available for sale	$
Less: Ending finished goods
Cost of goods sold

Answer 1

Statement of Cost of Goods Manufactured
Direct materials, beginning	5,000
Purchase of direct materials	117,500
Total direct materials available	$122,500
Direct materials, ending	-4,900
Direct materials used	$117,600
Direct labor	70,000
Variable overhead	28,000
Fixed overhead	235,000
Total manufacturing cost	$450,600
Work in process, beginning	12,700
Work in process, ending	-14,700
Cost of goods manufactured	$448,600

Pietro Frozen Foods, Inc.
Statement of Cost of Goods Sold
For the Coming Year
Cost of goods manufactured	448,600
Add: Beginning finished goods	43,500
Cost of goods available for sale	$492,100
Less: Ending finished goods	-35,000
Cost of goods sold	$457,100

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