 Hello in this lecture, we're gonna continue on the master budget and we will continue to the next piece being the budgeted costs of goods Manufactured, let's take a quick recap of where we have been so far once again We had to start off and we do have to do these in order with the sales budget and the production budget Then the raw materials budget the direct materials budget the factory overhead budget the selling budget General administrative cash type accounts so that we could then make the cash budget Now we're going to go on to the budget for cost of goods manufactured Obviously this seems like a awfully long process, but if we break it down to the pieces It's really not so bad when we look at it all as a whole it could look quite Intimidating all right, so we're gonna start off with the raw materials now remember There's three pieces to the cost of goods manufactured what goes into our inventory process raw materials labor and overhead So we're gonna start off with the raw material Now I'm gonna start off with the raw materials inventory at the beginning of the time period So we're gonna start off with raw materials at the beginning of the time period We're gonna get that from our balance sheet up top. So if we take a look at the balance sheet We have raw materials ninety eight five hundred ninety eight five Hundred then we're gonna add to that the raw materials that were purchased. So raw materials purchase I'm gonna select tab. We're gonna select equals and we're gonna go up to the raw materials budget where we have that Information so we're gonna scroll up to the raw materials here And if we go to the bottom of this item, we can see that for the quarter We have the total purchases of the six hundred eleven four seventy four dollars. So that's what we're gonna have That's what we purchased then we're gonna subtract from that the raw material at the end the raw material It's still in there note that this is very similar to our cost of goods sold calculation for like a meant for a Company that sells inventory basically so less raw material inventory at the end Indian raw material inventory We're gonna select equals we're gonna go back up to our raw materials up top So we're looking for where we calculated the raw materials here It is part number three and you can see that here we have the Indian inventory materials purchase materials price Here's the budgeted Indian inventory four thousand units. So I'm gonna take that four thousand that's in units though And we're gonna multiply that times the cost per unit, which is of course this twenty one dollars That's how much the raw materials cost per unit. Therefore, we're gonna come up with the eighty four thousand And that will give us the direct materials that will be used. So we have direct material used I'm gonna pull that out to the outside and it's gonna equal remember it's gonna equal what we started with plus what we purchased Minus the Indian inventory. That's what we use what we had plus what we purchased minus Which still there is what we have used in the process of Manufacturing as part of our inventory now included in that we also have direct labor Which is a lot more easy and straightforward. We're gonna put that right in the outer column We're not gonna have to do this type of calculation in order to get that That's why we'll put it right in the outer column and that's gonna equal I'm gonna go up to the labor budget up here where we figured out the direct labor and we have the 425.99 that's the labor that is included in our inventory Then we're gonna have the factory overhead Factory overhead and that's gonna have a variable portion and a fixed portion I'll just put those both in here now fixed portion And we're gonna go to the overhead budget Once again pretty straightforward because these will be what it'll be what they are We're not gonna have to do the calculation again like this in the raw materials We've already done that in our budget up top. So let's go up to the overhead budget. So here's our overhead Here's the variable portion. We're gonna pick up that 78,000 and that's gonna go into the inventory the overhead that we couldn't put into a bucket It's gonna go into the inventory then we're gonna have the fixed portion that was remember the depreciation So we're gonna go up to the overhead the fixed portion 63,000 and that is that