Question
The budget director of Birding Homes & Feeders Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following
The budget director of Birding Homes & Feeders Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for January:
- Estimated sales for January:
Bird house 15,000 units at $25 per unit Bird feeder 40,000 units at $15 per unit - Estimated inventories at January 1:
Direct materials: Wood 600 ft. Plastic 1,000 lbs. Finished products: Bird house 1,000 units at $15 per unit Bird feeder 2,500 units at $8 per unit - Desired inventories at January 31:
Direct materials: Wood 500 ft. Plastic 1,250 lbs. Finished products: Bird house 1,500 units at $15 per unit Bird feeder 3,000 units at $8 per unit - Direct materials used in production:
In manufacture of Bird House: Wood 0.80 ft. per unit of product Plastic 0.10 lb. per unit of product In manufacture of Bird Feeder: Wood 0.20 ft. per unit of product Plastic 1.00 lb. per unit of product - Anticipated cost of purchases and beginning and ending inventory of direct materials:
Wood $2.50 per ft. Plastic $0.80 per lb. - Direct labor requirements:
Bird House: Fabrication Department 0.40 hr. at $18 per hr. Assembly Department 0.20 hr. at $12 per hr. Bird Feeder: Fabrication Department 0.25 hr. at $18 per hr. Assembly Department 0.10 hr. at $12 per hr. - Estimated factory overhead costs for January:
Indirect factory wages $40,000 Depreciation of plant and equipment 20,000 Power and light 10,000 Insurance and property tax 5,000 - Estimated operating expenses for January:
Sales salaries expense $125,000 Advertising expense 80,000 Office salaries expense 40,000 Depreciation expenseoffice equipment 4,000 Travel expenseselling 25,000 Office supplies expense 2,500 Miscellaneous administrative expense 3,500 - Estimated other revenue and expense for January:
Interest revenue $4,540 Interest expense 3,000 - Estimated tax rate: 25%
5. Prepare a factory overhead cost budget for January.
- Advertising expense
- Indirect factory wages
- Office salaries expense
- Office supplies expense
- Sales salaries expense
Birding Homes & Feeders Inc. Factory Overhead Cost Budget For the Month Ending January 31 | ||
---|---|---|
$fill in the blank 52 | ||
fill in the blank 54 | ||
fill in the blank 56 | ||
fill in the blank 58 | ||
Total factory overhead cost | $fill in the blank 59 |
6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $9,000, and work in process at the end of January is estimated to be $10,500. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
- Direct materials inventory, January 1
- Direct materials inventory, January 31
- Direct materials purchases
- Factory overhead
- Finished goods inventory, January 1
- Finished goods inventory, January 31
Birding Homes & Feeders Inc. Cost of Goods Sold Budget For the Month Ending January 31 | |||
---|---|---|---|
$fill in the blank 61 | |||
$fill in the blank 63 | |||
Direct materials: | |||
$fill in the blank 65 | |||
fill in the blank 67 | |||
Cost of direct materials available for use | $fill in the blank 68 | ||
fill in the blank 70 | |||
Cost of direct materials placed in production | $fill in the blank 71 | ||
fill in the blank 73 | |||
fill in the blank 75 | |||
Total manufacturing costs | fill in the blank 76 | ||
Total work in process during period | $fill in the blank 77 | ||
fill in the blank 79 | |||
Cost of goods manufactured | fill in the blank 80 | ||
Cost of finished goods available for sale | $fill in the blank 81 | ||
fill in the blank 83 | |||
Cost of goods sold | $fill in the blank 84 |
7. Prepare a selling and administrative expenses budget for January.
- Depreciation expenseoffice equipment
- Miscellaneous administrative expense
- Office salaries expense
- Office supplies expense
- Sales salaries expense
- Telephone expenseadministrative
- Advertising expense
- Office salaries expense
- Power and light
- Sales salaries expense
- Telephone expenseselling
- Travel expenseselling
Birding Homes & Feeders Inc. Selling and Administrative Expenses Budget For the Month Ending January 31 | |||
---|---|---|---|
Selling expenses: | |||
$fill in the blank 86 | |||
fill in the blank 88 | |||
fill in the blank 90 | |||
Total selling expenses | $fill in the blank 91 | ||
Administrative expenses: | |||
$fill in the blank 93 | |||
fill in the blank 95 | |||
fill in the blank 97 | |||
fill in the blank 99 | |||
Total administrative expenses | fill in the blank 100 | ||
Total operating expenses | $fill in the blank 101 |
8. Prepare a budgeted income statement for January. In the Other revenue and expense section, indicate expenses as negative amounts.
- Gross profit
- Income before income tax
- Interest expense
- Interest revenue
- Revenue from sales
- Cost of goods sold
- Interest revenue
- Net income
- Net loss
- Selling expenses
- Gross profit
- Interest expense
- Interest revenue
- Net income
- Revenue from sales
Birding Homes & Feeders Inc. Budgeted Income Statement For the Month Ending January 31 | |||
---|---|---|---|
$fill in the blank 103 | |||
fill in the blank 105 | |||
$fill in the blank 107 | |||
Operating expenses: | |||
$fill in the blank 109 | |||
fill in the blank 111 | |||
Total operating expenses | fill in the blank 112 | ||
Operating income | $fill in the blank 113 | ||
Other revenue and expense: | |||
$fill in the blank 115 | |||
fill in the blank 117 | fill in the blank 118 | ||
Income before income tax | $fill in the blank 119 | ||
fill in the blank 121 | |||
Net income | $fill in the blank 122 |
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