Question
The budget director of Birds of a Feather Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following
The budget director of Birds of a Feather 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:
Birdhouse 6,000 units at $55 per unit Bird feeder 4,500 units at $75 per unit - Estimated inventories at January 1:
Direct materials: Wood 220 ft. Plastic 250 lb. Finished products: Birdhouse 300 units at $23 per unit Bird feeder 240 units at $34 per unit - Desired inventories at January 31:
Direct materials: Wood 180 ft. Plastic 210 lb. Finished products: Birdhouse 340 units at $23 per unit Bird feeder 200 units at $34 per unit - 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 - Anticipated cost of purchases and beginning and ending inventory of direct materials:
Wood $8.00 per ft. Plastic $1.20 per lb. - Direct labor requirements:
Birdhouse: Fabrication Department 0.20 hr. at $15 per hr. Assembly Department 0.30 hr. at $12 per hr. Bird Feeder: Fabrication Department 0.40 hr. at $15 per hr. Assembly Department 0.35 hr. at $12 per hr. - Estimated factory overhead costs for January:
Indirect factory wages $80,000 Depreciation of plant and equipment 25,000 Power and light 8,000 Insurance and property tax 2,000 - Estimated operating expenses for January:
Sales salaries expense $90,000 Advertising expense 20,000 Office salaries expense 18,000 Depreciation expenseoffice equipment 800 Telephone expenseselling 500 Telephone expenseadministrative 200 Travel expenseselling 5,000 Office supplies expense 250 Miscellaneous administrative expense 450 - Estimated other income and expense for January:
Interest revenue $300 Interest expense 224 - Estimated tax rate: 30%
5. Prepare a Budget that estimates the cost for each item of factory overhead needed to support budgeted production.factory overhead cost budget for January.
Birds of a Feather Inc. Factory Overhead Cost Budget For the Month Ending January 31 | ||
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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 $29,000, and work in process at the end of January is estimated to be $35,400.
Birds of a Feather Inc. Cost of Goods Sold Budget For the Month Ending January 31 | |||
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Direct materials: | |||
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Cost of direct materials available for use | |||
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Cost of direct materials placed in production | |||
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Total manufacturing costs | |||
Total work in process during the period | |||
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Cost of goods manufactured | |||
Cost of finished goods available for sale | |||
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Cost of goods sold | $ |
7. Prepare a selling and administrative expenses budget for January.
Birds of a Feather Inc. Selling and Administrative Expenses Budget For the Month Ending January 31 | |||
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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.
Birds of a Feather Inc. Budgeted Income Statement For the Month Ending January 31 | |||
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Selling and administrative expenses: | |||
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Total selling and administrative expenses | |||
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Other revenue: | |||
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Other expenses: | |||
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| $ |
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