Budgeted Income Statement and Supporting Budgets

The budget director of Birds and Beyond 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	7,500 units at $66 per unit
   Bird feeder	5,000 units at $82 per unit

2. Estimated inventories at January 1:

   Direct materials:
   Wood	198 ft.
   Plastic	420 lb.
   Finished products:
   Birdhouse	500 units at $28 per unit
   Bird feeder	210 units at $40 per unit

3. Desired inventories at January 31:

   Direct materials:
   Wood	220 ft.
   Plastic	340 lb.
   Finished products:
   Birdhouse	400 units at $28 per unit
   Bird feeder	250 units at $40 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	$9.00 per ft.
   Plastic	$1.40 per lb.

6. Direct labor requirements:

   Birdhouse:
   Fabrication Department	0.25 hr. at $20 per hr.
   Assembly Department	0.30 hr. at $15 per hr.
   Bird Feeder:
   Fabrication Department	0.40 hr. at $20 per hr.
   Assembly Department	0.35 hr. at $15 per hr.

7. Estimated factory overhead costs for January:

   Indirect factory wages	$92,000
   Depreciation of plant and equipment	34,000
   Power and light	10,100
   Insurance and property tax	2,800

8. Estimated operating expenses for January:

   Sales salaries expense	$85,100
   Advertising expense	17,600
   Office salaries expense	19,200
   Depreciation expenseoffice equipment	1,100
   Telephone expenseselling	1,000
   Telephone expenseadministrative	400
   Travel expenseselling	3,800
   Office supplies expense	350
   Miscellaneous administrative expense	250

9. Estimated other income and expense for January:

   Interest revenue	$450
   Interest expense	294

10. Estimated tax rate: 25%

Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $33,600, and work in process at the end of January is estimated to be $41,200.

Birds and Beyond Inc. Cost of Goods Sold Budget For the Month Ending January 31
Finished goods inventory, January 1			$fill in the blank 52
Work in process inventory, January 1		$fill in the blank 54
Direct materials:
Direct materials inventory, January 1	$fill in the blank 56
Direct materials purchases	fill in the blank 58
Cost of direct materials available for use	$fill in the blank 59
	fill in the blank 61
Cost of direct materials placed in production	$fill in the blank 62
	fill in the blank 64
	fill in the blank 66
Total manufacturing costs		fill in the blank 67
Total work in process during the period		$fill in the blank 68
		fill in the blank 70
Cost of goods manufactured			fill in the blank 71
Cost of finished goods available for sale			$fill in the blank 72
			fill in the blank 74
Cost of goods sold			$fill in the blank 75

7. Prepare a selling and administrative expenses budget for January.

Birds and Beyond Inc. Selling and Administrative Expenses Budget For the Month Ending January 31
Selling expenses:
	Sales salaries expense	$fill in the blank 76
	Advertising expense	fill in the blank 77
	Telephone expenseselling	fill in the blank 78
	Travel expenseselling	fill in the blank 79
	Total selling expenses		$fill in the blank 80
Administrative expenses:
	Office salaries expense	$fill in the blank 81
	Depreciation expenseoffice equipment	fill in the blank 82
	Telephone expenseadministrative	fill in the blank 83
	Office supplies expense	fill in the blank 84
	Miscellaneous administrative expense	fill in the blank 85
	Total administrative expenses		fill in the blank 86
Total operating expenses			$fill in the blank 87

8. Prepare a budgeted income statement for January.

Birds and Beyond Inc. Budgeted Income Statement For the Month Ending January 31
			$fill in the blank 89
			fill in the blank 91
			$fill in the blank 93
Operating expenses:
		$fill in the blank 95
		fill in the blank 97
	Total operating expenses		fill in the blank 98
			$fill in the blank 100
Other revenue:
		$fill in the blank 102
Other expenses:
		fill in the blank 104	fill in the blank 105
			$fill in the blank 107
			fill in the blank 109
			$fill in the blank 111