Budgeted income statement and supporting budgets for three months

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.

January

February

March

First Quarter

Beginning finished goods inventory

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Cost of goods manufactured:

Cost of finished goods available for saleDirect materialsDirect laborEnding finished goods inventoryFactory overhead

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Cost of finished goods available for saleDirect laborEstimated units soldEnding finished goods inventoryFactory overhead

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Cost of finished goods available for saleDesired ending inventoryEstimated units soldEnding finished goods inventoryFactory overhead

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Total cost of goods manufactured

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Cost of finished goods available for saleDesired ending inventoryEstimated units soldEnding finished goods inventoryVariable factory overhead rate

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Budgeted fixed factory overheadDesired ending inventoryEstimated units soldEnding finished goods inventoryVariable factory overhead rate

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Budgeted fixed factory overheadCost of goods soldDirect labor hoursEstimated units soldVariable factory overhead rateCost of goods sold

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
Administrative expensesCost of goods soldDirect materialsSalesSelling expenses	$- Select -	$- Select -	$- Select -	$- Select -
Administrative expensesBudgeted sales unitsCost of goods soldDirect materialsSelling expenses	- Select -	- Select -	- Select -	- Select -
Gross profit	$fill in the blank 5efb6a097f96f83_11	$fill in the blank 5efb6a097f96f83_12	$fill in the blank 5efb6a097f96f83_13	$fill in the blank 5efb6a097f96f83_14
Selling and administrative expenses:
Administrative expensesBudgeted sales unitsDirect materialsFixed selling expensesSelling expenses	$- Select -	$- Select -	$- Select -	$- Select -
Administrative expensesBudgeted sales unitsDirect materialsDirect laborFixed selling expenses	- Select -	- Select -	- Select -	- Select -
Total selling and administrative expenses	$fill in the blank 5efb6a097f96f83_25	$fill in the blank 5efb6a097f96f83_26	$fill in the blank 5efb6a097f96f83_27	$fill in the blank 5efb6a097f96f83_28
Operating incomeOperating loss	$- Select -	$- Select -	$- Select -	$- Select -