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 $0\mathrm{.}80$ ft$.$ per unit of product

Plastic $0\mathrm{.}10$ lb$.$ per unit of product

In manufacture of Bird Feeder:

Wood $0\mathrm{.}20$ ft$.$ per unit of product

Plastic $1\mathrm{.}00$ lb$.$ per unit of product

e$.$ Anticipated cost of purchases and beginning and ending inventory of direct materials:

Wood $$2\mathrm{.}50$ per ft$.$ Plastic $$0\mathrm{.}80$ per lb$.$

f$.$ Direct labor requirements:

Bird House:

Fabrication Department $0\mathrm{.}40$ hr$.$ at $$18$ per hr$.$

Assembly Department $0\mathrm{.}20$ hr$.$ at $$12$ per hr$.$

Bird Feeder:

Fabrication Department $0\mathrm{.}25$ hr$.$ at $$18$ per hr$.$

Assembly Department $0\mathrm{.}10$ hr$.$ at $$12$ per hr$.$

g$.$ Estimated factory overhead costs for January:

Line Item Description Amount

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:

Line Item Description Amount

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:

Line Item Description Amount

Interest revenue $$4,540$

Interest expense $3,000$

j$.$ Estimated tax rate: $25\%$

Required:

$1.$ Prepare a sales budget for January.

Birding Homes & Feeders Inc.

Sales Budget

For the Month Ending January $31$

Line Item Description Unit Sales

Volume Unit Selling

Price Total Sales

Bird house fill in the blank $1$

$15,000$

$fill in the blank $2$

$25$

$fill in the blank $3$

$375,000$

Bird feeder fill in the blank $4$

$40,000$

fill in the blank $5$

$15$

fill in the blank $6$

$600,000$

Total revenue from sales $fill in the blank $7$

$975,000$

$2.$ 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 $31$

Line Item Description Units

Bird House Units

Bird Feeder

Expected units to be sold

fill in the blank $9$

$15,000$

fill in the blank $10$

$40,000$

Desired inventory, January $31$

fill in the blank $12$

$1,500$

fill in the blank $13$

$3,000$

Total units available

fill in the blank $15$

$16,500$

fill in the blank $16$

$43,000$

Estimated inventory, January $1$

fill in the blank $18$

$1,000$

fill in the blank $19$

$2,500$

Total units to be produced

fill in the blank $21$

$15,500$

fill in the blank $22$

$40,500$

$3.$ Prepare a direct materials purchases budget for January. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Birding Homes & Feeders Inc.

Direct Materials Purchases Budget

For the Month Ending January $31$

Line Item Description Wood Plastic Total

Required units for production:

Bird house fill in the blank $23$

$12,500$

fill in the blank $24$

Bird feeder fill in the blank $25$

$34,500$

fill in the blank $26$

Desired units of inventory, January $31$ fill in the blank $27$

fill in the blank $28$

Total units available fill in the blank $29$

fill in the blank $30$

Estimated units of inventory, January $1$ fill in the blank $31$

fill in the blank $32$

Total units to be purchased fill in the blank $33$

fill in the blank $34$

Unit price $fill in the blank $35$

$fill in the blank $36$

Total direct materials to be purchased $fill in the blank $37$

$fill in the blank $38$

$fill in the blank $39$

$4.$ Prepare a direct labor cost budget for January.

Birding Homes & Feeders Inc.

Direct Labor Cost Budget

For the Month Ending January $31$

Line Item Description Fabrication

Department Assembly

Department Total

Hours required for production:

Bird house fill in the blank $40$

fill in the blank $41$

Bird feeder fill in the blank $42$

fill in the blank $43$

Total fill in the blank $44$

fill in the blank $45$

Hourly rate $fill in the blank $46$

$fill in the blank $47$

Total direct labor cost $fill in the blank $48$

$fill in the blank $49$

$fill in the blank $50$

$5.$ Prepare a factory overhead cost budget for