Answered: Pietro Frozen Foods, Inc., produces…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 6CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...

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Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs: Direct materials ? Direct labor $67,000 Variable overhead 23,000 Fixed overhead 240,000 Next year, Pietro expects to purchase $129, 500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct materials Work-in-Process Inventory Inventory $4,000 $10,000 $3,900 $12,000 Beginning Ending Required: 1. Prepare a statement of cost of goods manufactured. 2. What if the ending inventory of direct materials increased by $2,300? Indicate the affect that this would have on the irems listed balow.

Cost of Gocds Manufactured
Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs:
Direct materials
Direct labor
$67,000
Variable overhead
23,000
Fixed overhead
240,000
Next year, Pietro expects to purchase $129,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:
Direct materials
Work-in-Process
Inventory
Inventory
Beginning
$4,000
$10,000
Ending
$3,900
$12,000
Required:
1. Prepare a statement of cost of goods manufactured.
Pietro Frozen Foods, Inc.
Statement of Cost of Goods Manufactured
For the Coming Year
Direct materials
Materials available
Direct materials used in production
Total manufacturing costs added
Cost of goods manufactured
2. What if the ending inventory of direct materials increased by $2,300? Indicate the affect that this would have on the items listed below:
Direction of change
Amount
Direct materials used
by
Total manufacturing costs
by $
Cost of goods manufactured
by $

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