Budgeted Income Statement and Supporting Budgets The budget director of Feathered Friends 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 December: a. Estimated sales for December: 3,200 units at Bird house $50 per unit 3,000 units at Bird feeder $70 per unit b. Estimated inventories at December 1: Direct materials: Wood 200 ft. Plastic 240 lbs. Finished products: 320 units at $27 Bird house per unit 270 units at $40 Bird feeder per unit c. Desired inventories at December 31: Direct materials: Wood 220 ft. Plastic 200 lbs. Finished products: 290 units at $27 Bird house per unit 250 units at $41 Bird feeder per unit d. Direct materials used in production: In manufacture of Bird House: Wood 0.80 ft. per unit of product Plastic 0.50 lb. per unit of product In manufacture of Bird Feeder: 1.20 ft. per unit Wood of product 0.75 lb. per unit Plastic of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $7.00 per ft. Plastic $1.00 per lb. f. Direct labor requirements: Bird House: 0.20 hr. at $16 Fabrication Department per hr. Assembly Department 0.30 hr. at $12 per hr. Bird Feeder: Fabrication Department 0.40 hr. at $16 per hr. Assembly Department 0.35 hr. at $12 per hr g. Estimated factory overhead costs for December: Indirect factory wages $75,000 Depreciation of plant and equipment 23,000 Power and light 6,000 Insurance and property tax 5,000 h. Estimated operating expenses for December: Sales salaries expense $70,000 Advertising expense 18,000 Office salaries expense 21,000 Depreciation expense-office equipment 600 Telephone expense-selling 550 Telephone expense-administrative 250 Travel expense-selling 4,000 Office supplies expense 200 Miscellaneous administrative expense 400 i. Estimated other income and expense for December: Interest revenue $200 Interest expense 122 j. Estimated tax rate: 30% Required: 1. Prepare a sales budget for December. Feathered Friends Inc. Sales Budget For the Month Ending December 31 Unit Sales Unit Selling Total Sales Volume Price Bird house Bird feeder Total revenue from sales $ 2. Prepare a production budget for December. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Feathered Friends Inc. Production Budget For the Month Ending December 31 Units Bird House Bird Feeder 3. Prepare a direct materials purchases budget for December. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Feathered Friends Inc. Direct Materials Purchases Budget For the Month Ending December 31 Wood Plastic Total Required units for production: Bird house Bird feeder Desired units of inventory, December 31 Total units available Estimated units of inventory, December 1 Total units to be purchased Unit price $ Total direct materials to be purchased 4. Prepare a direct labor cost budget for December. Feathered Friends Inc. Direct Labor Cost Budget For the Month Ending December 31 Fabrication Assembly Department Total Department Hours required for production: Bird house Bird feeder Total Hourly rate $ Total direct labor cost $ 5. Prepare a factory overhead cost budget for December Feathered Friends Inc. Factory Overhead Cost Budget For the Month Ending December 31 Total factory overhead cost 6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be $29,000, and work in process at the end of December is estimated to be $35,400. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Feathered Friends Inc. Cost of Goods Sold Budget For the Month Ending December 31 Direct materials: $ Cost of direct materials available for use $ Cost of direct materials placed in production s 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 December 8. Prepare a budgeted income statement for December. In the other revenue and expense section, indicate expenses as negative amounts. Feathered Friends Inc. Feathered Friends Inc. Selling and Administrative Expenses Budget Budgeted Income Statement For the Month Ending December 31 For the Month Ending December 31 Selling expenses! 5$ $$ Operating expenses: Total selling expenses $$ Administrative expenses: Total operating expenses $$ Income from operations $$ Other revenue and expense: $$ Income before income tax $$ Total administrative expenses Total operating expenses Net income 5$