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: 15,000 units at Bird house $25 per unit 40,000 units at Bird feeder $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 0.80 ft. per unit of product 0.10 lb. per unit of product Plastic In manufacture of Bird Feeder: Wood 0.20 ft. per unit of product 1.00 lb. per unit Plastic of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $2.50 per ft. Plastic $0.80 per lb. f. Direct labor requirements: Bird House: 0.40 hr. at $18 Fabrication Department per hr. Assembly Department 0.20 hr. at $12 per hr. Bird House: Fabrication Department 0.40 hr. at $18 per hr. 0.20 hr. at $12 Assembly Department per hr. Bird Feeder: Fabrication Department 0.25 hr. at $18 per hr. 0.10 hr. at $12 per hr. Assembly Department $40,000 20,000 10,000 5,000 $125,000 80,000 g. Estimated factory overhead costs for January: Indirect factory wages Depreciation of plant and equipment Power and light Insurance and property tax h. Estimated operating expenses for January: Sales salaries expense Advertising expense Office salaries expense Depreciation expense-office equipment Travel expense-selling Office supplies expense Miscellaneous administrative expense i. Estimated other revenue and expense for January: Interest revenue Interest expense j. Estimated tax rate: 25% 40,000 4,000 25,000 2,500 3,500 $4,540 3,000 Required: 1. Prepare a sales budget for January. Birding Homes & Feeders Inc. Sales Budget For the Month Ending January 31 Unit Sales Volume Unit Selling Price Total Sales Bird house 1,500 x $ $ $ $ Bird feeder Total revenue from sales $ $ 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 Units Bird House Bird Feeder Expected units to be sold Desired inventory, January 31 Total units available Estimated inventory, January 1 Total units to be produced B. 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 Wood Plastic Total Required units for production: Bird house Bird feeder Desired units of inventory, January 31 Total units available Estimated units of inventory, January 1 Total units to be purchased Unit price Total direct materials to be purchased Birding Homes & Feeders Inc. Direct Labor Cost Budget For the Month Ending January 31 Fabrication Department Assembly Department Total Hours required for production: Bird house Bird feeder Total Hourly rate $ X$ $ x $ Total direct labor cost $ $ $ $ $ 5. Prepare a factory overhead cost budget for January. Birding Homes & Feeders 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 factory overhead cost 6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $9,000, and work in process at the end of January is estimated to be $10,500. For those boxes in which you must enter subtracted or negative numbers use a minus sign. $ $ $$ Cost of Goods Sold Budget For the Month Ending January 31 Finished goods inventory, January 1 Work in process inventory, January 1 Direct materials: Direct materials inventory, January 1 $ $ Direct materials purchases Cost of direct materials available for use Direct materials inventory, January 31 Cost of direct materials placed in production $ $ $$ Direct labor $ $$ Factory overhead Total manufacturing costs Total work in process during period Work in process inventory, January 31 Cost of goods manufactured Cost of finished goods available for sale Finished goods inventory, January 31 $ $ Cost of goods sold $ $ 8. Prepare a budgeted income statement for January. In the other revenue and expense section, indicate expenses as negative amounts. $$ 975,000 528,689 x $$ 446,311 x Birding Homes & Feeders Inc. Budgeted Income Statement For the Month Ending January 31 Revenue from sales Cost of goods sold Gross profit Operating expenses: Selling expenses $ $ 125,000 x Administrative expenses 80,000 x Total operating expenses Operating income Other revenue and expense: Interest revenue $ $ $ $ Interest expense Income before income tax $ $ Income tax expense 280,000 x Net income $ $ 166,311 X