The budget director of Birds and Beyond 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:

1. Estimated sales for January:

   Birdhouse	7,500 units at $66 per unit
   Bird feeder	5,000 units at $82 per unit

2. Estimated inventories at January 1:

   Direct materials:
   Wood	198 ft.
   Plastic	420 lb.
   Finished products:
   Birdhouse	500 units at $28 per unit
   Bird feeder	210 units at $40 per unit

3. Desired inventories at January 31:

   Direct materials:
   Wood	220 ft.
   Plastic	340 lb.
   Finished products:
   Birdhouse	400 units at $28 per unit
   Bird feeder	250 units at $40 per unit

4. Direct materials used in production:

   In manufacture of BirdHouse:
   Wood	0.80 ft. per unit of product
   Plastic	0.50 lb. per unit of product
   In manufacture of Bird Feeder:
   Wood	1.20 ft. per unit of product
   Plastic	0.75 lb. per unit of product

5. Anticipated cost of purchases and beginning and ending inventory of direct materials:

   Wood	$9.00 per ft.
   Plastic	$1.40 per lb.

6. Direct labor requirements:

   Birdhouse:
   Fabrication Department	0.25 hr. at $20 per hr.
   Assembly Department	0.30 hr. at $15 per hr.
   Bird Feeder:
   Fabrication Department	0.40 hr. at $20 per hr.
   Assembly Department	0.35 hr. at $15 per hr.

7. Estimated factory overhead costs for January:

   Indirect factory wages	$92,000
   Depreciation of plant and equipment	34,000
   Power and light	10,100
   Insurance and property tax	2,800

8. Estimated operating expenses for January:

   Sales salaries expense	$85,100
   Advertising expense	17,600
   Office salaries expense	19,200
   Depreciation expenseoffice equipment	1,100
   Telephone expenseselling	1,000
   Telephone expenseadministrative	400
   Travel expenseselling	3,800
   Office supplies expense	350
   Miscellaneous administrative expense	250

9. Estimated other income and expense for January:

   Interest revenue	$450
   Interest expense	294

10. Estimated tax rate: 25%

1. Prepare a sales budget for January.

Birds and Beyond Inc. Sales Budget For the Month Ending January 31
	Unit Sales Volume	Unit Selling Price	Total Sales
Birdhouse
Bird feeder
Total revenue from sales

2. Prepare a production budget for January.

Birds and Beyond Inc. Production Budget For the Month Ending January 31
	Units
		Birdhouse		Bird Feeder
Expected units to be sold
Plus desired inventory, January 31
Total units required
Less estimated inventory, January 1
Total units to be produced

3. Prepare a direct materials purchases budget for January. Round your unit price answers to two decimal places.

Birds and Beyond Inc. Direct Materials Purchases Budget For the Month Ending January 31
	Wood	Plastic	Total
Required units for production:
Birdhouse
Bird feeder
Plus desired units of inventory, January 31
Total units required
Less estimated units of inventory, January 1
Total units to be purchased
Unit price
Total direct materials to be purchased

4. Prepare a direct labor cost budget for January.

Birds and Beyond Inc. Direct Labor Cost Budget For the Month Ending January 31
			Fabrication Department		Assembly Department	Total
Hours required for production:
	Birdhouse
	Bird feeder
	Total hours required
Hourly rate
Total direct labor cost

5. Prepare a factory overhead cost budget for January.

Birds and Beyond Inc. Factory Overhead Cost Budget For the Month Ending January 31
	Indirect factory wages
	Depreciation of plant and equipment
	Power and light
	Insurance and property tax
	Total

6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $33,600, and work in process at the end of January is estimated to be $41,200.

Birds and Beyond Inc. Cost of Goods Sold Budget For the Month Ending January 31
Direct materials inventory, January 1Direct materials inventory, January 31Factory OverheadFinished goods inventory, January 1Finished goods inventory, January 31
Direct materials inventory, January 1Direct materials inventory, January 31Factory OverheadWork in process inventory, January 1Work in process inventory, January 31
Direct materials:
Direct materials inventory, January 1Direct materials inventory, January 31Finished goods inventory, January 1Work in process inventory, January 1Work in process inventory, January 31
Direct laborDirect materials purchasesFactory overheadFinished goods inventory, January 31Work in process inventory, January 1Work in process inventory, January 31
Cost of direct materials available for use
Less: Direct materials inventory, January 1Less: Direct materials inventory, January 31Less: Finished goods inventory, January 1Less: Work in process inventory, January 1Less: Work in process inventory, January 31
Cost of direct materials placed in production
Direct laborDirect materials purchasesFinished goods inventory, January 31Work in process inventory, January 1Work in process inventory, January 31
Direct materials purchasesFactory overheadFinished goods inventory, January 31Work in process inventory, January 1Work in process inventory, January 31
Total manufacturing costs
Total work in process during the period
Less: Direct materials inventory, January 1Less: Finished goods inventory, January 1Less: Finished goods inventory, January 31Less: Work in process inventory, January 1Less: Work in process inventory, January 31
Cost of goods manufactured
Cost of finished goods available for sale
Less: Direct materials inventory, January 1Less: Direct materials inventory, January 31Less: Finished goods inventory, January 1Less: Finished goods inventory, January 31Less: Work in process inventory, January 31
Cost of goods sold

7. Prepare a selling and administrative expenses budget for January.

Birds and Beyond Inc. Selling and Administrative Expenses Budget For the Month Ending January 31
Selling expenses:
	Sales salaries expense
	Advertising expense
	Telephone expenseselling
	Travel expenseselling
	Total selling expenses
Administrative expenses:
	Office salaries expense
	Depreciation expenseoffice equipment
	Telephone expenseadministrative
	Office supplies expense
	Miscellaneous administrative expense
	Total administrative expenses
Total operating expenses

8. Prepare a budgeted income statement for January.