Chapter 21 - Homework

1. EX.21-02.ALGO
2. EX.21-03.ALGO
3. EX.21-04.ALGO
4. EX.21-09.ALGO
5. EX.21-11.ALGO
6. EX.21-12.ALGO
7. EX.21-13.ALGO
8. EX.21-14.ALGO
9. EX.21-15.ALGO
10. EX.21-17.ALGO
11. EX.21-18.ALGO
12. EX.21-19.ALGO
13. PR.21-02A
14. PR.21-03A
15. PR.21-04A.ALGO
16. PR.21-05A.ALGO

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    Budgeted Income Statement and Supporting Budgets

    The budget director of Feathered Friends 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 December:

    1. Estimated sales for December:

       Bird house	3,200 units at $50 per unit
       Bird feeder	3,000 units at $70 per unit

    2. Estimated inventories at December 1:

       Direct materials:
       Wood	200 ft.
       Plastic	240 lbs.
       Finished products:
       Bird house	320 units at $27 per unit
       Bird feeder	270 units at $40 per unit

    3. Desired inventories at December 31:

       Direct materials:
       Wood	220 ft.
       Plastic	200 lbs.
       Finished products:
       Bird house	290 units at $27 per unit
       Bird feeder	250 units at $41 per unit

    4. 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

    5. Anticipated cost of purchases and beginning and ending inventory of direct materials:

       Wood	$7.00 per ft.
       Plastic	$1.00 per lb.

    6. Direct labor requirements:

       Bird House:
       Fabrication Department	0.20 hr. at $16 per hr.
       Assembly Department	0.30 hr. at $12 per hr.
       Bird Feeder:
       Fabrication Department	0.40 hr. at $16 per hr.
       Assembly Department	0.35 hr. at $12 per hr.

    7. Estimated factory overhead costs for December:

       Indirect factory wages	$75,000
       Depreciation of plant and equipment	23,000
       Power and light	6,000
       Insurance and property tax	5,000

    8. Estimated operating expenses for December:

       Sales salaries expense	$70,000
       Advertising expense	18,000
       Office salaries expense	21,000
       Depreciation expenseoffice equipment	600
       Telephone expenseselling	550
       Telephone expenseadministrative	250
       Travel expenseselling	4,000
       Office supplies expense	200
       Miscellaneous administrative expense	400

    9. Estimated other income and expense for December:

       Interest revenue	$200
       Interest expense	122

    10. Estimated tax rate: 30%

    Required:

    1. Prepare a sales budget for December.

    Feathered Friends Inc. Sales Budget For the Month Ending December 31
    	Unit Sales Volume	Unit Selling Price	Total Sales
    Bird house
    Bird feeder
    Total revenue from sales

    2. Prepare a production budget for December. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

    Feathered Friends Inc. Production Budget For the Month Ending December 31
    	Units
    		Bird House		Bird Feeder

    3. Prepare a direct materials purchases budget for December. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

    Feathered Friends Inc. Direct Materials Purchases Budget For the Month Ending December 31
    	Wood	Plastic	Total
    Required units for production:
    Bird house
    Bird feeder
    Desired units of inventory, December 31
    Total units available
    Estimated units of inventory, December 1
    Total units to be purchased
    Unit price
    Total direct materials to be purchased

    4. Prepare a direct labor cost budget for December.

    Feathered Friends Inc. Direct Labor Cost Budget For the Month Ending December 31
    			Fabrication Department		Assembly Department	Total
    Hours required for production:
    	Bird house
    	Bird feeder
    	Total
    Hourly rate
    Total direct labor cost

    5. Prepare a factory overhead cost budget for December.

    Feathered Friends Inc. Factory Overhead Cost Budget For the Month Ending December 31
    	$
    Total factory overhead cost	$

    6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be $29,000, and work in process at the end of December is estimated to be $35,400. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

    Feathered Friends Inc. Cost of Goods Sold Budget For the Month Ending December 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 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 December.

    Feathered Friends Inc. Selling and Administrative Expenses Budget For the Month Ending December 31
    Selling expenses:
    		$
    Total selling expenses			$
    Administrative expenses:
    		$
    Total administrative expenses
    Total operating expenses			$

    8. Prepare a budgeted income statement for December. In the Other revenue and expense section, indicate expenses as negative amounts.

    Feathered Friends Inc. Budgeted Income Statement For the Month Ending December 31
    			$
    			$
    Operating expenses:
    		$
    Total operating expenses
    Income from operations			$
    Other revenue and expense:
    		$
    Income before income tax			$
    Net income			$