1. 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:

   January	25,000	units
   February	30,000	units
   March	45,000	units
   April	50,000	units

   b. Estimated finished goods inventories:

   January 1	2,000	units
   January 31	10%	of next months sales
   February 28	10%	of next months sales
   March 31	10%	of next months sales

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

   d. Estimated direct materials inventories:

   January 1	1,000	lbs.
   January 31	1,500	lbs.
   February 28	2,000	lbs.
   March 31	2,500	lbs.

   e. Manufacturing costs:

   	Per Unit
   Direct materials (0.8 lb. per unit $15 per lb.)	$ 12
   Direct labor (2.5 hrs. per unit $24 per hr.)	60
   Variable factory overhead ($1.20 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:

   Variable selling expenses	$4	per unit
   Fixed selling expenses	$150,000
   Administrative expenses (all fixed costs)	$400,000

   6. Prepare a cost of goods sold budget for March.

   Bellaire Inc.
   Cost of Goods Sold Budget
   For the First Quarter Ending March 31
   	January	February	March	First Quarter
   Beginning finished goods inventory	$	$	$	$
   Cost of goods manufactured:
   Direct materials Cost of finished goods available for sale Direct materials Direct labor Ending finished goods inventory Factory overhead	$	$	$	$
   Direct labor Cost of finished goods available for sale Direct labor Estimated units sold Ending finished goods inventory Factory overhead
   Factory overhead Cost of finished goods available for sale Desired ending inventory Estimated units sold Ending finished goods inventory Factory overhead
   Total cost of goods manufactured	$	$	$	$
   Cost of finished goods available for sale Cost of finished goods available for sale Desired ending inventory Estimated units sold Ending finished goods inventory Variable factory overhead rate	$	$	$	$
   Ending finished goods inventory Budgeted fixed factory overhead Desired ending inventory Estimated units sold Ending finished goods inventory Variable factory overhead rate
   Cost of goods sold Budgeted fixed factory overhead Cost of goods sold Direct labor hours Estimated units sold Variable factory overhead rate	$	$	$	$

   7. Prepare a selling and administrative expenses budget for March. Enter all amounts as positive number.

   Bellaire Inc.
   Selling and Administrative Expenses Budget
   For the First Quarter Ending March 31
   	January	February	March	First Quarter
   Selling expenses:
   Budgeted sales units Budgeted sales units Budgeted fixed administrative expenses Direct materials Variable selling expenses per unit sold Fixed selling expenses
   Variable selling expenses per unit sold Budgeted fixed administrative expenses Direct labor Direct materials Variable selling expenses per unit sold Fixed selling expenses	x$	x$	x$	x$
   Total variable selling expenses	$	$	$	$
   Fixed selling expenses Budgeted fixed administrative expenses Cost of goods sold Direct labor Direct materials Fixed selling expenses
   Total selling expenses	$	$	$	$
   Administrative expenses:
   Budgeted fixed administrative expenses Budgeted fixed administrative expenses Cost of goods sold Cost of finished goods available for sale Direct labor Direct materials
   Total selling and administrative expenses	$	$	$	$

   8. Prepare a budgeted income statement with budgeted operating income for March.

   Bellaire Inc.
   Budgeted Income Statement
   For the First Quarter Ending March 31
   	January	February	March	First Quarter
   Sales Administrative expenses Cost of goods sold Direct materials Sales Selling expenses	$	$	$	$
   Cost of goods sold Administrative expenses Budgeted sales units Cost of goods sold Direct materials Selling expenses
   Gross profit	$	$	$	$
   Selling and administrative expenses:
   Selling expenses Administrative expenses Budgeted sales units Direct materials Fixed selling expenses Selling expenses	$	$	$	$
   Administrative expenses Administrative expenses Budgeted sales units Direct materials Direct labor Fixed selling expenses
   Total selling and administrative expenses	$	$	$	$
   Operating income Operating income Operating loss	$	$	$	$