Chapter 7 Budgeting 357 I. Estimated other income and expense for December: Interest revenue $200 Interest expense 122 J. Estimated tax rate: 30% Instructions 1. Prepare a sales budget for December. 2. Prepare a production budget for December. 3. Prepare a direct materials purchases budget for December. 4. Prepare a direct labor cost budget for December. 5. Prepare a factory overhead cost budget for December. 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. 7. Prepare a selling and administrative expenses budget for December. 8. Prepare a budgeted income statement for December.PR 7-3A Budgeted income statement and supporting budgets Obi. 4 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: A. Estimated sales for December: Bird house ........................................... 3,200 units at $50 per unit Bird feeder ........................................... 3,000 units at $70 per unit B. Estimated inventories at December 1: Direct materials: Finished products: Wood ........ 200 ft. Bird house ....... 320 units at $27 per unit Plastic ........ 240 lbs. Bird feeder ....... 270 units at $40 per unit C. Desired inventories at December 31: Direct materials: Finished products: Wood ........ 220 ft. Bird house ....... 290 units at $27 per unit Plastic ........ 200 lbs. Bird feeder ....... 250 units at $41 per unit D. Direct materials used in production: In manufacture of Bird House: In manufacture of Bird Feeder: Wood ............ 0.80 ft. per unit of product Wood ........... 1.20 ft. per unit of product Plastic ............ 0.50 lb. 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 ............ $7.00 per ft. Plastic ........... $1.00 per lb. F. Direct labor requirements: F. 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. G. Estimated factory overhead costs for December: Indirect factory wages $75,000 Power and light $6,000 Depreciation of plant and equipment 23,000 Insurance and property tax 5,000 H. Estimated operating expenses for December: Sales salaries expense $70,000 Advertising expense 18,000 Ofce salaries expense 21,000 Depreciation expenseofce equipment 600 Telephone expenseselling 550 Telephone expenseadministrative 250 Travel expenseselling 4,000 Ofce supplies expense 200 Miscellaneous administrative expense 400