Task #2

You have completed the budgets for the production inputs for 2022, summarized below.

January

February

March

April

May

June

Direct materials

$30,624

$50,945

$75,547

$76,000

$63,230

$50,584

Direct labour

$30,019

$49,940

$74,055

$74,499

$61,981

$49,585

Manufacturing overhead

$12,615

$20,986

$31,120

$31,307

$26,046

$20,837

July

August

September

October

November

December

Direct materials

$41,678

$32,772

$29,923

$27,608

$23,867

$22,528

Direct labour

$40,855

$32,126

$29,332

$27,062

$23,395

$22,083

Manufacturing overhead

$17,169

$13,500

$12,326

$11,372

$ 9,832

$ 9,280

The cost per unit of the opening inventory in January is expected to be $705 per unit.

You were also provided with the following to use for the selling and administrative budget.

Prior-year monthly expense information and assumptions:

Shipping costs

$45

per unit (no expected change)

Wages and salaries

$20,000

expected to increase by 3% inflation only

at the beginning of the year and then remain constant

Depreciation

$8,200

expected to stay the same

Utilities

$7,100

expected to increase by 3% in February

and then remain constant

Insurance

$4,100

expected to increase by 2% on renewal in April

and then remain constant

Miscellaneous

$2,900

expected to stay the same

a) Prepare the monthly cost of goods sold budget for 2022.

b) Prepare the monthly selling and administrative expenses budget for 2022.

c) Prepare the annual budgeted net income statement for 2022, ignoring income taxes based upon the information provided.