The budgeted finished goods inventory and cost of goods sold for a manufacturing company for the year are as follows: January 1 finished goods,$765,000; December 31 finished goods,$540,000; and cost of goods sold for the year,$2,560,000.The budgeted costs of goods manufactured for the year is

Question

Quizplus · Accepted Answer

The cost of goods manufactured is equal to the cost of goods sold plus the decrease in finished goods inventory.

Cost of goods manufactured = Cost of goods sold + (Beginning finished goods inventory - Ending finished goods inventory)
Cost of goods manufactured = $2,560,000 + ($765,000 - $540,000)
Cost of goods manufactured = $2,335,000

Therefore, the budgeted costs of goods manufactured for the year is $2,335,000.

The Budgeted Finished Goods Inventory and Cost of Goods Sold