Prepare a cost of goods sold budget for Pasadena Candle Inc. using the information in Basic Exercises 3 and 4. Assume the estimated inventories on January 1 for finished goods and work in process were $200,000 and $41,250, respectively. Also assume the desired inventories on January 31 for finished goods and work in process were $120,000 and $28,500, respectively. Factory overhead was budgeted at $300,000.

Exercises 3

Pasadena Candle Inc. budgeted production of 785,000 candles for January. Wax is required to produce a candle. Assume 10 ounces of wax is required for each candle. The estimated January
1 wax inventory is 16,000 pounds. The desired January 31 wax inventory is 12,500 pounds. 

Exercises 4

Pasadena Candle Inc. budgeted production of 785,000 candles for January. Each candle requires molding. Assume that six minutes are required to mold each candle.