Budgeted Income statement and supporting Budgets The budget director of Birds of a Feather 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: Birdhouse 6,000 units at $55 per unit Bird feeder 4,500 units at $75 per unit b. Estimated inventories at January 1: Direct materials: Wood 220 ft. Plastic 250 lb. Finished products: Birdhouse 300 units at $23 per unit Bird feeder 240 units at $34 per unit c. Desired inventories at January 31: Direct materials: Wood 180 ft. Plastic 210 lb. Finished products: Birdhouse 340 units at $23 per unit Bird feeder 200 units at $34 per unit g. Estimated factory overhead costs for January: Indirect factory wages $80,000 Depreciation of plant and equipment 25,000 Power and light 8,000 2,000 Insurance and property tax h. Estimated operating expenses for January: Sales salaries expense $90,000 Advertising expense 20,000 Office salaries expense 18,000 Depreciation expense-office equipment 800 Telephone expense-selling 500 Telephone expense-administrative 200 Travel expense-selling 5,000 Office supplies expense 250 Miscellaneous administrative expense 450 i. Estimated other income and expense for January: Interest revenue $300 224 Interest expense j. Estimated tax rate: 30% Required: 1. Prepare a sales budget for January. Birds of a Feather Inc. Sales Budget For the Month Ending January 31 Unit Sales Volume Unit Selling Price Total Sales Birdhouse Bird feeder Total revenue from sales 2. Prepare a production budget for January. Birds of a Feather Inc. Production Budget For the Month Ending January 31 Units Birdhouse Bird Feeder Expected units to be sold Plus desired inventory, January 31 Total Less estimated inventory, January 1 Total units to be produced 4. Prepare a direct labor cost budget for January. Birds of a Feather Inc. Direct Labor Cost Budget For the Month Ending January 31 Fabrication Assembly Department Total Department Hours required for production: Birdhouse Bird feeder Total Hourly rate A LA LA Total direct labor cost 5. Prepare a factory overhead cost budget for January. Birds of a Feather Inc. Factory Overhead Cost Budget For the Month Ending January 31 Indirect factory wages Depreciation of plant and equipment Power and light Insurance and property tax Total 6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $29,000, and work in process at the end of January is estimated to be $35,400. Birds of a Feather 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 the period Cost of goods manufactured Cost of finished goods available for sale Cost of goods sold
