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:

a. Estimated sales for January:

Birdhouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 units at $55 per unit

Bird feeder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500 units at $75 per unit

b. 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

c. Desired inventories at January 31:

d. Direct materials used in production:

e. Anticipated cost of purchases and beginning and ending inventory of direct materials:
Wood . . . . . . . . . . . . . . . . . . . . . . . . $8.00 per ft.
Plastic . . . . . . . . . . . . . . . . . . . . . . . . $1.20 per lb.
f. 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.
g. 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
h. Estimated operating expenses for January:
Sales salaries expense.............................$90,000
Advertising expense................................20,000
Office salaries expense.............................18,000
Depreciation expense-office equipment...........800
Telephone expense-selling...........................500
Telephone expense-administrative..................200
Travel expense-selling..............................5,000
Office supplies expense................................250
Miscellaneous administrative expense 450
i. Estimated other income and expense for January:
Interest revenue.....................$300
Interest expense.......................224
j. Estimated tax rate: 30%
Instructions
1. Prepare a sales budget for January.
2. Prepare a production budget for January.
3. Prepare a direct materials purchases budget for January.
4. Prepare a direct labor cost budget for January.
5. Prepare a factory overhead cost budget for January.
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.
7. Prepare a selling and administrative expenses budget for January.
8. Prepare a budgeted income statement for January.

Transcribed Image Text:

Direct materials: Finished products: Birdhouse wood 180ii. 210 lb. 340 units at $23 per unit .. .. In manufacture of Birdhouse: In manufacture of Bird Feeder: 0.80 ft. per unit of product Wood 0.50 lb. per unit of product Plastic