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: Bird house 15,000 units at $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 Bird feeder 2,500 units at $8 per unit c. Desired inventories at January 31: Direct materials: Wood 500 ft. Plastic 1,250 lbs. Finished products: Bird house 1,500 units at $15 per unit Bird feeder 3,000 units at $8 per unit 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: Wood 0.20 ft. per unit of product Plastic 1.00 lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $2.50 per ft. Plastic $0.80 per lb. f. Direct labor requirements: Bird House: Fabrication Department 0.40 hr. at $18 per hr. Assembly Department 0.20 hr. at $12 per hr. Bird Feeder: Fabrication Department 0.25 hr. at $18 per hr. Assembly Department 0.10 hr. at $12 per hr. g. Estimated factory overhead costs for January: Indirect factory wages $40,000 Depreciation of plant and equipment 20,000 Power and light 10,000 Insurance and property tax 5,000 h. Estimated operating expenses for January: Sales salaries expense $125,000 Advertising expense 80,000 Office salaries expense 40,000 Depreciation expense-office equipment 4,000 Travel expense-selling 25,000 Office supplies expense 2,500 Miscellaneous administrative expense 3,500 i. Estimated other revenue and expense for January: Interest revenue $4,540 Interest expense 3,000 j. Estimated tax rate: 25% Required: 1. Prepare a sales budget for January. Bird house Bird feeder Total revenue from sales Birding Homes & Feeders Inc. Sales Budget For the Month Ending January 31 Unit Sales Volume Unit Selling Price Total Sales 2. Prepare a production budget for January. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Birding Homes & Feeders Inc. Production Budget For the Month Ending January 31 Units Units Bird House Bird Feeder 3. Prepare a direct materials purchases budget for January. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Required units for production: Bird house Bird feeder Desired units of inventory, January 31 Birding Homes & Feeders Inc. Direct Materials Purchases Budget For the Month Ending January 31 Total units available Estimated units of inventory, January 1 Total units to be purchased Unit price Total direct materials to be purchased Wood Plastic Total 4. Prepare a direct labor cost budget for January. Hours required for production: Bird house Bird feeder Total Hourly rate Total direct labor cost Birding Homes & Feeders Inc. Direct Labor Cost Budget For the Month Ending January 31 Fabrication Department 5. Prepare a factory overhead cost budget for January. Total factory overhead cost Birding Homes & Feeders Inc. Factory Overhead Cost Budget For the Month Ending January 31 Assembly Department Total 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. Direct materials: Birding Homes & Feeders Inc. Cost of Goods Sold Budget For the Month Ending January 31 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