$7.$Multiperiod budgeted income statement and supporting budgets

Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter $($January$,$ February, March$)$ of its fiscal year:

a$.$ Estimated sales at $$125$ per unit:

Month Sales

January $25,000$ units

February $30,000$ units

March $45,000$ units

April $50,000$ units

b$.$ Estimated finished goods inventories:

Month Finished Goods Inventory

January $12,000$ units

January $3110\%$ of next month$$s sales

February $2810\%$ of next month$$s sales

March $3110\%$ of next month$$s sales

c$.$ Work in process inventories are estimated to be insignificant $($zero$).$

d$.$ Estimated direct materials inventories:

Month Direct Materials Inventory

January $11,000$ lbs$.$

January $311,500$ lbs$.$

February $282,000$ lbs$.$

March $312,500$ lbs$.$

e$.$ Manufacturing costs:

Line Item Description Per Unit

Direct materials $(0\mathrm{.}8$ lb$.$ per unit $\backslash$times $$15$ per lb$.)$ $ $12$

Direct labor $(2\mathrm{.}5$ hrs$.$ per unit $\backslash$times $$24$ per hr$.)60$

Variable factory overhead $($$$1\mathrm{.}20$ per direct labor hour$)3$

Fixed factory overhead $($$$200,000$ per month, allocated using $40,000$ units$)5$

Total per$-$unit manufacturing costs $$80$

f$.$ Selling expenses:

Line Item Description Amount

Variable selling expenses $$4$ per unit

Fixed selling expenses $$150,000$

Administrative expenses $($all fixed costs$)$ $$400,000$ Prepare a selling and administrative expenses budget for the first quarter. Enter all amounts as positive number.

Bellaire Inc.

Selling and Administrative Expenses Budget

For the First Quarter Ending March $31$

Line Item Description January February March First Quarter

Selling expenses: blank blank blank blank

x$

$4$

x$

$4$

x$

$4$

x$

$4$

Total variable selling expenses $Total variable selling expenses

$Total variable selling expenses

$Total variable selling expenses

$Total variable selling expenses

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

Total selling expenses $Total selling expenses

$Total selling expenses

$Total selling expenses

$Total selling expenses

Administrative expenses: blank blank blank blank

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

Total selling and administrative expenses $Total selling and administrative expenses

$Total selling and administrative expenses

$Total selling and administrative expenses

$Total selling and administrative expenses

$8.$ Prepare a budgeted income statement with budgeted operating income for the first quarter. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Bellaire Inc.

Budgeted Income Statement

For the First Quarter Ending March $31$

Line Item Description January February March First Quarter

Cost of goods sold

$Cost of goods sold

$Cost of goods sold

$Cost of goods sold

$Cost of goods sold

Budgeted sales units

Budgeted sales units

Budgeted sales units

Budgeted sales units

Budgeted sales units

Gross profit $Gross profit

$Gross profit

$Gross profit

$Gross profit

Selling and administrative expenses: blank blank blank blank

Budgeted sales units

$Budgeted sales units

$Budgeted sales units

$Budgeted sales units

$Budgeted sales units

Administrative expenses

Administrative expenses

Administrative expenses

Administrative expenses

Administrative expenses

Total selling and administrative expenses $Total selling and administrative expenses

$Total selling and administrative expenses

$Total selling and administrative expenses

$Total selling and administrative expenses

Operating income

$Operating income

$Operating income

$Operating income

$Operating income

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