Budgeted Income Statement and Supporting Budgets The budget director of Birding Homes & Feeders Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for January: a. Estimated sales for January: 15,000 units at Bird house $25 per unit Bird feeder 40,000 units at $15 per unit b. Estimated inventories at January 1: Direct materials: Wood 600 ft. Plastic 1,000 lbs. Finished products: Bird house 1,000 units at $15 per unit 2,500 units at $8 per unit Bird feeder C. Desired inventories at January 31: Direct materials: Wood 500 ft. Plastic 1,250 lbs. Finished products: Finished products: Bird house 1,500 units at $15 per unit 3,000 units at $8 per unit Bird feeder d. Direct materials used in production: In manufacture of Bird House: Wood 0.80 ft. per unit of product Plastic 0.10 lb. per unit of product In manufacture of Bird Feeder: 0.20 ft. per unit Wood of product 1.00 lb. per unit Plastic of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $2.50 per ft. Plastic $0.80 per Ib. f. Direct labor requirements: Bird House: Fabrication Department 0.40 hr. at $18 per hr. 0.20 hr. at $12 A---A LL.- -- Assembly Department per hr. Bird Feeder: Fabrication Department 0.25 hr. at $18 per hr. 0.10 hr. at $12 per hr. Assembly Department g. Estimated factory overhead costs for January: Indirect factory wages $40,000 20,000 Depreciation of plant and equipment Power and light 10,000 5,000 Insurance and property tax h. Estimated operating expenses for January: Sales salaries expense $125,000 80,000 Advertising expense Office salaries expense 40,000 Depreciation expense-office equipment 4,000 Travel expense-selling 25,000 Office supplies expense 2,500 3,500 Miscellaneous administrative expense 1. Estimated other revenue and expense for January: Interest revenue $4,540 Interest expense 3,000 3,500 Miscellaneous administrative expense i. Estimated other revenue and expense for January: Interest revenue $4,540 3,000 Interest expense j. Estimated tax rate: 25% 5. Prepare a factory overhead cost budget for January. Birding Homes & Feeders Inc. Factory Overhead Cost Budget For the Month Ending January 31 Total factory overhead cost 6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $9,000, and work in process at the end of January is estimated to be $10,500. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Birding Homes & Feeders Inc. Cost of Goods Sold Budget For the Month Ending January 31 $ $ Direct materials: Cost of direct materials available for use $ $ Cost of direct materials placed in production $ $ Total manufacturing costs Total work in process during period $$ Cost of goods manufactured Cost of finished goods available for sale $$ Cost of goods sold $$ 7. Prepare a selling and administrative expenses budget for January. Birding Homes & Feeders Inc. Selling and Administrative Expenses Budget For the Month Ending January 31 Selling expenses: $$ Total selling expenses Administrative expenses: Total administrative expenses Total operating expenses 8. Prepare a budgeted income statement for January. In the other revenue and expense section, indicate expenses as negative amounts. Birding Homes & Feeders Inc. Budgeted Income Statement For the Month Ending January 31 $$ $$ Operating expenses: Total operating expenses Operating income $ $ Other revenue and expense: $$ Income before income tax $$ Net income
