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 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 220ft Bird house...... 290 units at $27 per unit Plastic 200 lbs. Bird feeder.. 250 units at 541 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 f. Direct labor requirements: Bird House Fabrication Department. 0.20 h at $16 per hr Assembly Department 0.30 ht at $12 perhe Bird Feeder: Fabrication Department 0.40 hr at $16 perhr. Assembly Department 0.35 h at $12 perhe 8. 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 600 Telephone expense-selling 550 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 Interest revenue $200 Interest expense 122 1. 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 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 1 6 7. 8. 9 10 11 12 13 FEATHERED FRIENDS INC. Sales Budget For the Month Ending December 31, 2014 Unit Sales Unit Selling Volume Price Total Sales Product Bird house Bird feeder Total revenue from sales 15 16 7 8 n/a 9 2. FEATHERED FRIENDS INC. Production Budget For the Month Ending December 31, 2014 Units Bird House Bird Feeder Expected units to be sold Total Total units to be produced n/a n/a 3. FEATHERED FRIENDS INC Direct Materials Purchases Budget For the Month Ending December 31, 2014 Wood (feet) Plastic (lbs.) Total Required units for production: Bird house Bird feeder Total Total units to be purchased Unit price Total direct materials to be purchased FALSE FALSE FALSE FEATHERED FRIENDS INC Direct Labor Cost Budget For the Month Ending December 31, 2014 Fabrication Department Assembly Department Total Hours required for production: Bird house Bird feeder Total Hourly rate Total direct labor cost FALSE 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 materiais 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 proft 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 UUD FALSE FALSE