Dor PR 22-3A Budgeted income statement and supporting budgets OBJ. 4 The budget director of Birds and Beyond Inc., with the assistance of the controller, trea- surer, 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: Birdhouse Bird feeder... 7,500 units at $66 per unit 5,000 units at $82 per unit b. Estimated inventories at January 1: Direct materials: Wood 198 ft. Plastic........ 420 lb. Finished products: Birdhouse ... Bird feeder 500 units at $28 per unit 210 units at $40 per unit Chapter 22 Budgeting Birdhouse........... 400 units at $28 per unit Bird feeder......... 250 units at $40 per unit In manufacture of Bird Feeder: Wood................ 1.20 ft per unit of product Plastic............... 0.75 lb per unit of product C. Desired inventories at January 31: Direct materials Finished products: Wood......... 220 ft Plastic......... 340 lb d. Direct materials used in production: In manufacture of Birdhouse: Wood............ 0.80 ft. per unit of product Plastic............ 0.50 ib. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood ......... ................ $9.00 per ft. Plastic f. Direct labor requirements: Birdhouse: Fabrication Department Assembly Department Bird Feeder: Fabrication Department Assembly Department $1.40 per lb 0.25 hr at $20 per hr. 0.30 hr. at $15 per hr 0.40 hr at $20 per hr. 0.35 hr. at $15 per hr. $10,100 2,800 g. Estimated factory overhead costs for January: Indirect factory wages $92,000 Power and light Depreciation of plant and equipment 34,000 Insurance and property tax h. Estimated operating expenses for January: Sales salaries expense $85,100 Advertising expense 17,600 Office salaries expense 19,200 Depreciation expense-office equipment 1,100 Telephone expense-selling 1,000 Telephone expense-administrative 400 Travel expense--selling 3,800 Office supplies expense 350 Miscellaneous administrative expense 250 i. Estimated other income and expense for January: Interest revenue Interest expense $450 294 j. Estimated tax rate: 25% Instructions 1. Prepare a sales budget for January 2. Prepare a production budget for January 3. Prepare a direct materials purchases budget for January. 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 $33,600, and work in process at the end of January is estimated to be $41,200. 7. Prepare a selling and administrative expenses budget for January. 8. Prepare a budgeted income statement for January
