Bunni, Inc. has prepared the following budgets for March. In March, budgeted production equals budgeted sales, and raw materials inventory will stay constant. What is budgeted cost of goods sold for March? Solution Cost of Goods sold does not include selling and administrative expenses as they are indirect costs. Hence, Cost of goods sold = Direct materials + Direct labor + Manufacturing overheads = $4,100 + $7,200 + $10,500 = $21,800 (Answer) .