Question
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
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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
$ $ $ $
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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
| $ | $ | $ | $ |
Direct labor
| ||||
Factory overhead
| ||||
Total cost of goods manufactured | $ | $ | $ | $ |
Cost of finished goods available for sale
| $ | $ | $ | $ |
Ending finished goods inventory
| ||||
Cost of goods sold
| $ | $ | $ | $ |
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
| ||||
Variable selling expenses per unit sold
| x$ | x$ | x$ | x$ |
Total variable selling expenses | $ | $ | $ | $ |
Fixed selling expenses
| ||||
Total selling expenses | $ | $ | $ | $ |
Administrative expenses: | ||||
Budgeted fixed administrative expenses
| ||||
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
| $ | $ | $ | $ |
Cost of goods sold
| ||||
Gross profit | $ | $ | $ | $ |
Selling and administrative expenses: | ||||
Selling expenses
| $ | $ | $ | $ |
Administrative expenses
| ||||
Total selling and administrative expenses | $ | $ | $ | $ |
Operating income
| $ | $ | $ | $ |
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