Sleep Tight Manufactures Comforters

question 174

Essay

Sleep Tight manufactures comforters.The estimated inventories on January 1 for finished goods,work in process,and materials were $39,000,$33,000,and $27,000,respectively.The desired inventories on December 31 for finished goods,work in process,and materials were $42,000,$35,000,and $21,000,respectively.Direct material purchases were $575,000,direct labor was $212,000 for the year,and factory overhead was $156,000.Prepare a cost of goods sold budget for Sleep Tight,Inc.

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Definitions:

Economic Profits

The difference between a firm's total revenue and its opportunity costs; also known as supernormal profit.

Price Elasticity Of Demand

A measure of how sensitive the quantity demanded of a good is to a change in its price.

Marginal Cost

The increase in total production cost that comes from making or producing one extra item.

Production Function

Refers to the relationship between input resources (like labor, land, and capital) and the output produced by these resources.