Question
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:
a. Estimated sales for January:
Bird house | 6,000 units at $55 per unit |
Bird feeder | 4,500 units at $75 per unit |
b. Estimated inventories at January 1:
Direct materials: | |
Wood | 220 ft. |
Plastic | 250 lbs. |
Finished products: | |
Bird house | 300 units at $23 per unit |
Bird feeder | 240 units at $34 per unit |
c. Desired inventories at January 31:
Direct materials: | |
Wood | 180 ft. |
Plastic | 210 lbs. |
Finished products: | |
Bird house | 340 units at $23 per unit |
Bird feeder | 200 units at $34 per unit |
d. 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 |
e. Anticipated cost of purchases and beginning and ending inventory of direct materials:
Wood | $8.00 per ft. |
Plastic | $1.20 per lb. |
f. Direct labor requirements:
Bird House: | |
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. |
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 expenseoffice equipment | 800 |
Telephone expenseselling | 500 |
Telephone expenseadministrative | 200 |
Travel expenseselling | 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%
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 Bird house 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 Bird House Bird Feeder Expected units to be sold Plus desired inventory, January 31 Total Less estimated inventory, January 1 Total units to be produced
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