Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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:

  1. Estimated sales for January:
    Birdhouse 6,000 units at $55 per unit
    Bird feeder 4,500 units at $75 per unit
  2. 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
  3. 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
  4. Direct materials used in production:
    In manufacture of BirdHouse:
    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
  5. Anticipated cost of purchases and beginning and ending inventory of direct materials:
    Wood $8.00 per ft.
    Plastic $1.20 per lb.
  6. Direct labor requirements:
    Birdhouse:
    Fabrication Department 0.20 hr. at $15 per hr.
    Assembly Department 0.30 hr. at $12 per hr.
    Bird Feeder:
    Fabrication Department 0.40 hr. at $15 per hr.
    Assembly Department 0.35 hr. at $12 per hr.
  7. 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
  8. Estimated operating expenses for January:
    Sales salaries expense $90,000
    Advertising expense 20,000
    Office salaries expense 18,000
    Depreciation expenseoffice equipment 800
    Telephone expenseselling 500
    Telephone expenseadministrative 200
    Travel expenseselling 5,000
    Office supplies expense 250
    Miscellaneous administrative expense 450
  9. Estimated other income and expense for January:
    Interest revenue $300
    Interest expense 224
  10. 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

3. Prepare a direct materials purchases budget for January.

Birds of a Feather Inc. Direct Materials Purchases Budget For the Month Ending January 31
Wood Plastic 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 Department Assembly Department Total
Hours required for production:
Birdhouse
Bird feeder
Total
Hourly rate $ $
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 $

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 expenseselling
Travel expenseselling
Total selling expenses
Administrative expenses:
Office salaries expense
Depreciation expenseoffice equipment
Telephone expenseadministrative
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
Other revenue:
Other expenses:
$

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Theory And Analysis Text And Cases

Authors: Richard G. Schroeder, Myrtle W. Clark, Jack M. Cathey

14th Edition

1119881226, 978-1119881223

More Books

Students also viewed these Accounting questions

Question

In which ways would you measure training success? Explain.

Answered: 1 week ago

Question

Evaluate Meyers and Browns approach to career development.

Answered: 1 week ago