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: 220 ft. Wood Plastic 250 Ib. Finished products: 300 units at $23 per unit Birdhouse 240 units at $34 per unit Bird feeder c. Desired inventories at January 31: Direct materials: Wood 180 ft. Plastic 210 Ib. Finished products: Birdhouse 340 units at $23 per unit Bird feeder 200 units at $34 per unit d. Direct materials used in production: In manufacture of BirdHouse: Wood 0.80 ft. per unit of product Plastic 0.50 Ib. per unit of product In manufacture of Bird Feeder: Wood 1.20 ft. per unit of product Plastic 0.75 Ib. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $8.00 per ft. Plastic $1.20 per Ib. f. Direct labor requirements: Birdhouse: Fabrication Department 0.20 hr. at $15 per hr. 0.30 hr. at $12 per hr. Assembly Department Bird Feeder: 0.40 hr. at $15 per hr. Fabrication Department 0.35 hr. at $12 per hr. Assembly Department g. Estimated factory overhead costs for January: Indirect factory wages $80,000 Depreciation of plant and equipment 25,000 Power and light 8,000 Insurance and property tax 2,000 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 $300 Interest expense 224 j. Estimated tax rate: 30% Required: 1. Prepare a sales budget for January. Birds of a Feather Inc. Sales Budget For the Month Ending January 31 Unit Selling Unit Sales Total Sales Volume Price Birdhouse Bird feeder Total revenue from sales %24 2. Prepare a production budget for January. Birds of a Feather Inc. Production Budget For the Month Ending January 31 Units Birdhouse Bird Feeder Expected units to be sold Plus desired inventory, January 31 Total Less estimated inventory, January 1 Total units to be produced 3. Prepare a direct materials purchases budget for January. Birds of a Feather Inc. Direct Materials Purchases Budget For the Month Ending January 31 Plastic Wood Total Required units for production: Birdhouse Bird feeder Plus desired units of inventory, January 31 Total Less estimated units of inventory, January 1 Total units to be purchased Unit price Total direct materials to be purchased 4. Prepare a direct labor cost budget for January. Birds of a Feather Inc. Direct Labor Cost Budget For the Month Ending January 31 Fabrication Assembly Department Total Department Hours required for production: Birdhouse Bird feeder Total Hourly rate Total direct labor cost 2$ 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 7. Prepare a selling and administrative expenses budget for January. Birds of a Feather Inc. Selling and Administrative Expenses Budget For the Month Ending January 31 Selling expenses: Sales salaries expense Advertising expense Telephone expense-selling Travel expense-selling Total selling expenses Administrative expenses: Office salaries expense Depreciation expense-office equipment Telephone expense-administrative Office supplies expense Miscellaneous administrative expense Total administrative expenses Total operating expenses 8. Prepare a budgeted income statement for January. Birds of a Feather Inc. Budgeted Income Statement For the Month Ending January 31 Selling and administrative expenses: Total selling and administrative expenses 24 Other revenue: Other expenses: %24
