Operating income for quarter, $$2,365,000$

PR $22-4$A Budgeted income statement and supporting budgets for three months

Obj. $4$

Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter $($January$,$ February, March$)$ of its fiscal year:

a$.$ Estimated sales at $$125$ per unit:

January $.................................25,000$ units

February $...............................30,000$ units

March..................................... $45,000$ units

April $.................................50,000$ units

b$.$ Estimated finished goods inventories:

January $31$dots........................$\mathrm{.}10\%$ of next month's sales

February $28.............................10\%$ of next month's sales

March $31$dots...................$\mathrm{.}10\mathrm{.}10$ of next month's sales

c$.$ Work in process inventories are estimated to be insignificant $($zero$).$

d$.$ Estimated direct materials inventories:

January $1...............................1,000$ lbs$.$

March $31.............................2,.2,500$ lbs$.$

e$.$ Manufacturing costs:

Direct materials $(0\mathrm{.}8lb.$ per unit $$$$15$ per lb$.)$

Direct labor $(2\mathrm{.}5hrs.$ per unit $$$$24$ per hr$.)$

Variable factory overhead $($ $$1\mathrm{.}20$ per direct labor hour$)$

Fixed factory overhead $($ $$200,000$ per month, allocated using $40,000$ units$)$

Total per$-$unit manufacturing costs

Per Unit

f$.$ Selling expenses:

Variable selling expenses $q,$

$$12$

Fixed selling expenses $q,$ $$150,000$

Administrative expenses $($all fixed costs$).......$ $$400,000$

Instructions

Prepare the following budgets using one column for each month and a total column for the first quarter, as shown for the sales budget:

$\backslash$table$[[\backslash$table$[[$Bellaire Inc.$],[$Sales Budget$]],],[,$For the First Quarter Ending March $31,,,],[,$January,February,March,First Quarter$],[$Estimated units sold,$25,000,30,000,45,000,100,000]]$

Prepare a sales budget for March.

Prepare a production budget for March.

Prepare a direct materials purchases budget for March.

Prepare a direct labor cost budget for March.

Prepare a factory overhead cost budget for March.

Prepare a cost of goods sold budget for March.

Prepare a selling and administrative expenses budget for March.

Prepare a budgeted income statement with budgeted operating income for March.