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

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	$fill in the blank 2e7eb0fc7f81055_1	$fill in the blank 2e7eb0fc7f81055_2	$fill in the blank 2e7eb0fc7f81055_3	$fill in the blank 2e7eb0fc7f81055_4
Cost of goods manufactured:
Cost of finished goods available for saleDirect materialsDirect laborEnding finished goods inventoryFactory overhead	$- Select -	$- Select -	$- Select -	$- Select -
Cost of finished goods available for saleDirect laborEstimated units soldEnding finished goods inventoryFactory overhead	- Select -	- Select -	- Select -	- Select -
Cost of finished goods available for saleDesired ending inventoryEstimated units soldEnding finished goods inventoryFactory overhead	- Select -	- Select -	- Select -	- Select -
Total cost of goods manufactured	$fill in the blank 2e7eb0fc7f81055_20	$fill in the blank 2e7eb0fc7f81055_21	$fill in the blank 2e7eb0fc7f81055_22	$fill in the blank 2e7eb0fc7f81055_23
Cost of finished goods available for saleDesired ending inventoryEstimated units soldEnding finished goods inventoryVariable factory overhead rate	$- Select -	$- Select -	$- Select -	$- Select -
Budgeted fixed factory overheadDesired ending inventoryEstimated units soldEnding finished goods inventoryVariable factory overhead rate	- Select -	- Select -	- Select -	- Select -
Budgeted fixed factory overheadCost of goods soldDirect labor hoursEstimated units soldVariable factory overhead rate	$- Select -	$- Select -	$- Select -	$- Select -

Feedback

The cost of goods sold budget combines the budgeted costs from the direct labor, direct materials, and factory overhead budgets with estimated beginning and ending inventory to estimate a total 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 unitsBudgeted fixed administrative expensesDirect materialsVariable selling expenses per unit soldFixed selling expenses	- Select -	- Select -	- Select -	- Select -
Budgeted fixed administrative expensesDirect laborDirect materialsVariable selling expenses per unit soldFixed selling expenses	x$- Select -	x$- Select -	x$- Select -	x$- Select -
Total variable selling expenses	$fill in the blank 6dd82ff64f84041_11	$fill in the blank 6dd82ff64f84041_12	$fill in the blank 6dd82ff64f84041_13	$fill in the blank 6dd82ff64f84041_14
Budgeted fixed administrative expensesCost of goods soldDirect laborDirect materialsFixed selling expenses	- Select -	- Select -	- Select -	- Select -
Total selling expenses	$fill in the blank 6dd82ff64f84041_20	$fill in the blank 6dd82ff64f84041_21	$fill in the blank 6dd82ff64f84041_22	$fill in the blank 6dd82ff64f84041_23
Administrative expenses:
Budgeted fixed administrative expensesCost of goods soldCost of finished goods available for saleDirect laborDirect materials	- Select -	- Select -	- Select -	- Select -
Total selling and administrative expenses	$fill in the blank 6dd82ff64f84041_29	$fill in the blank 6dd82ff64f84041_30	$fill in the blank 6dd82ff64f84041_31	$fill in the blank 6dd82ff64f84041_32

Feedback

Estimated sales from the sales budget, estimated cost of goods sold from the cost of goods sold budget, and estimated selling and administrative expenses from the selling and administrative expense budget are used to prepare a budgeted income statement.

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 65db7df65fc6023_11	$fill in the blank 65db7df65fc6023_12	$fill in the blank 65db7df65fc6023_13	$fill in the blank 65db7df65fc6023_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 65db7df65fc6023_25	$fill in the blank 65db7df65fc6023_26	$fill in the blank 65db7df65fc6023_27	$fill in the blank 65db7df65fc6023_28
Operating incomeOperating loss	$- Select -	$- Select -	$- Select -	$- Select -