Assume the estimated January 1 inventory for finished goods and work in process were $54,000 and $47,000 respectively. Also assume the desired December 31 inventories for

finished goods and work in process were $50,000 and $49,000 respectively. Factory overhead was budgeted for $126,000.

Using the information on the previous tabs, prepare a cost of goods sold budget for Coopie Awards for the current year.

Coopie Awards

Budgeted Cost of Goods Sold

For the current year

Work in process Inventory January 1

Direct Materials:

Direct materials inventory January 1 (Note a)

Direct materials purchases

Cost of direct materials available for sale

Less direct materials December 31 (note b)

Cost of direct materials used in production

Direct labor

Factory Overhead

Cost of goods added to production

Cost of goods available

Less work in process December 31 inventory

Cost of goods manufactured

Plus Finished goods January 1

Less finished goods December 31

Cost of goods sold

Note a: 240000 X $0.12

Note b: 200000X.12

The following are date for the sales and administrative budget for Coopie Awards:

Sales Commissions7% of sales

Advertising Expense18% of sales

Misc. selling expense$1,750 plus 4% of sales

Office salaries expense$12,000 per month

office supplies expense5% of sales

Misc administrative expense$1,400 per month plus 2% of sales


Requirement: Prepare the selling and admin budget for Coopie Awards

Coopie Awards

Selling and Administrative Budget

For the current Year

Selling Expenses:

    Sales commissions

    Advertising expenses

    Miscellaneous selling  expenses

         Total selling expenses

Administrative expenses:

    Office salaries

    Office supplies

    Miscellaneous administrative  expenses

        Total administrative expenses

Total selling and administrative expenses

Coopie Awards pays 40% in income taxes.


Requirement: Prepare Coopie Awards’ budgeted income statement


Coopie Awards

Budgeted Income Statement

For the current year

Sales Revenue$0 

Cost of Goods sold0

Gross Profit$0 

Selling and administrative expenses0

Income from operations$0 

Income Tax0

Net Income$0 

Coopie Awards sold 43,000 brass plaques for the current year with the following results. In the discussion forum comment on Coopie Awards results.


Hint: Preparing a flexible budget will help in analyzing the results. Please show the flexible budget on this tab.


Actual ResultsBudget based on 45000 unisVariance

Sales Revenue $1,548,000 $1,575,000 $27,000 Unfavorable

Direct Materials costs498000518400$20,400 Favorable

Direct Labor Costs9480099000$4,200 Favorable

Overhead Costs126000126,000$0

total dierct costs $718,800 $743,400 $24,600 Favorable

Selling and administrative cost700000729550$29,550 Favorable

operating income $129,200 $102,050 ($27,150)Favorable