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 0.80 ft. per unit of product Plastic 0.10 lb. per unit of product In manufacture of Bird Feeder: Wood 0.20 ft. per unit of product Plastic 1.00 lb. per unit 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: Fabrication Department 0.40 hr. at $18 per hr. Assembly Department 0.20 hr. at $12 per hr. Bird Feeder: Fabrication Department 0.25 hr. at $18 per hr. Assembly Department 0.10 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 expenseoffice equipment	4,000
Travel expenseselling	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.

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. Direct Materials Purchases Budget For the Month Ending January 31 4. Prepare a direct labor cost budget for January. 5. Prepare a factory overhead cost budget for January. 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 manufactured Cost of finished goods available for sale Cost of goods sold 7. Prepare a selling and administrative expenses budget for January. 8. Prepare a budgeted income statement for January. In the Other revenue and expense section, indicate expenses as negative amounts