Refer to Cornerstone Exercise 2.2. Pietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be $34,000.
Required:
1. Prepare a statement of cost of goods sold in good form.
2.  What if the beginning inventory of finished goods decreased by $5,000? What would be the effect on the cost of goods sold?

Exercise 2.2

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Refer to Cornerstone Exercise 2.1. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs: Direct materials Direct labor $ 60,000 Variable overhead 25,000 Fixed overhead 220,000 Next year, Pietro expects to purchase $119,300 of direct materials. Projected beginning and end- ing inventories for direct materials and work in process are as follows: Direct Materials Work-in-Process Inventory Inventory $5,600 Beginning Ending S12,500 14,600 4,900