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 2016:

Estimated sales for December:

Bird house	3,200 units at $50 per unit
Bird feeder	3,000 units at $70 per unit

Estimated inventories at December 1:

Direct materials:
Wood	200 ft.
Plastic	240 lbs.
Finished products:
Bird house	320 units at $27 per unit
Bird feeder	270 units at $40 per unit

Desired inventories at December 31:

Direct materials:
Wood	220 ft.
Plastic	200 lbs.
Finished products:
Bird house	290 units at $27 per unit
Bird feeder	250 units at $41 per unit

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:
Wood	1.20 ft. per unit of product
Plastic	0.75 lb. per unit of product

Anticipated cost of purchases and beginning and ending inventory of direct materials:

Wood	$7.00 per ft.
Plastic	$1.00 per lb.

Direct labor requirements:

Bird House:
Fabrication Department	0.20 hr. at $16 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.

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

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

Estimated other income and expense for December:

Interest revenue	$200
Interest expense	122

Estimated tax rate: 30%

        

1. Prepare a sales budget for December. Bird house Bird feeder Total revenue from sales Feathered Friends Inc. Sales Budget For the Month Ending December 31, 2016 Unit Sales Unit Selling Volume Price 3,200 3,000 50 70 Total Sales $ 160,000 210,000 370,000