PR 22-3A Budgeted income statement and supporting budgets OBJ. 4 The budget director of Feathered Friends 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 December 2014: a. Estimated sales for December: Bird house 3,200 units at $50 per unit Bird feeder... 3,000 units at $ 70 per unit Wood 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: $7.00 per ft. Plastic.. $1.00 per lb. 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 Office salaries expense 21,000 Depreciation expense-office equipment Telephone expense-selling Telephone expense-administrative 250 Travel expense-selling 4,000 Office supplies expense 200 Miscellaneous administrative expense 400 i. Estimated other income and expense for December: 600 550 Interest revenue Interest expense j. Estimated tax rate: 30% $200 122 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. FEATHERED FRIENDS INC. Factory Overhead Cost Budget For the Month Ending December 31, 2014 Indirect factory wages Depreciation of plant and equipment Power and light Insurance and property tax Total n/a Work on the supporting calculations" below first: FEATHERED FRIENDS INC. Cost of Goods Sold Budget For the Month Ending December 31, 2014 FALSE Finished goods inventory, Dec. 1. 2014 Work in process, Dec 1, 2014 Direct materials Direct materials purchases Cost of direct materials available for use Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during period Cost of goods manufactured Cost of finished goods available for sale Less Cost of goods sold Supporting calculations: Units Cost Total FALSE Finished goods inventory, Dec 1, 2014: Bird house Bird feeder Total Finished goods inventory, Dec 31, 2014 Bird house Bird feeder Total Direct materials inventory, December 1, 2014 Wood Plastic Total Direct materials inventory, December 31, 2014 Wood Plastic Total FALSE FALSE FALSE FEATHERED FRIENDS INC. Selling and Administrative Expenses Budget For the Month Ending December 31, 2014 Selling expenses Total selling expenses Administrative expenses FALSE Total administrative expenses Total operating expenses FALSE FEATHERED FRIENDS INC. Budgeted Income Statement For the Month Ending December 31, 2014 FALSE Revenue from sales Cost of goods sold Gross profit Operating expenses Selling expenses Administrative expenses Total operating expenses Income from operations Other income Interest revenue Other expense Interest expense Income before income tax Income tax expense Net Income INI FALSE FALSE