Answer the following questions using the information below:
Beat, Inc., expects to sell 60,000 athletic uniforms for $80 each in 2012. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 2011:

-What is the amount budgeted for cost of goods manufactured in 2012?

Question

Answer the following questions using the information below:
Beat, Inc., expects to sell 60,000 athletic uniforms for $80 each in 2012. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 2011:
 
-What is the amount budgeted for cost of goods manufactured in 2012?

Quizplus · Accepted Answer

- Cost of goods sold (COGS) = Beginning inventory + Cost of goods manufactured - Ending inventory
- We are given the expected sales (60,000 uniforms x $80 = $4,800,000)
- To find the cost of goods manufactured, we need to calculate total manufacturing costs: 
Direct materials + Direct labor + Manufacturing overhead = $20 + $8 + $6 = $34
- Therefore, total manufacturing costs = 60,000 x $34 = $2,040,000 
- Beginning inventory is given at $260,000, and ending inventory is estimated at $292,000.
- Using the formula COGS = Beginning inventory + Cost of goods manufactured - Ending inventory, 
we get COGS = $260,000 + $2,040,000 - $292,000 = $2,008,000
- Hence, the amount budgeted for cost of goods manufactured in 2012 is $1,972,000 (option B).

Answer the Following Questions Using the Information Below