The budget director of Feathered Friends 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 December 2016:

a. Estimated sales for December:

Bird house . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,200 units at $50 per unit

Bird feeder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 units at $70 per unit

b. Estimated inventories at December 1:

c. Desired inventories at December 31:

d. Direct materials used in production:

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

f. Direct labor requirements:
Bird House:
Fabrication Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20 hr. at $16 per hr.
Assembly Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.30 hr. at $12 per hr.
Bird Feeder:
Fabrication Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40 hr. at $16 per hr.
Assembly Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.35 hr. at $12 per hr.
g. Estimated factory overhead costs for December:

h. Estimated operating expenses for December:
Sales salaries expense.......................................$70,000
Advertising expense..........................................18,000
Office salaries expense.......................................21,000
Depreciation expense-office equipment.....................600
Telephone expense-selling.....................................550
Telephone expense-administrative...........................250
Travel expense-selling.......................................4,000
Office supplies expense..........................................200
Miscellaneous administrative expense.........................400
i. Estimated other income and expense for December:
Interest revenue...........................$200
Interest expense............................122
j. Estimated tax rate: 30%
Instructions
1. Prepare a sales budget for December.
2. Prepare a production budget for December.
3. Prepare a direct materials purchases budget for December.
4. Prepare a direct labor cost budget for December.
5. Prepare a factory overhead cost budget for December.
6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be $29,000, and work in process at the end of December is estimated to be $35,400.
7. Prepare a selling and administrative expenses budget for December.
8. Prepare a budgeted income statement for December.

Transcribed Image Text:

Direct materials: Finished products: Hird house . . . . . . . Bird feeder....... 32E》 unis S2/ p Y unit 270 units at $40 per unit Direct materials: Finished products: 220 ft. 200 lbs 290 units at $27 per unit 250 units at $41 per unit Bird feeder....... In manufacture of Bird House: In manufacture of Bird Feeder: Wood.... Plastic....... 0.80 ft. per unit of product Wood... 1.20 ft. per unit of product 0.50 lb. per unit of product Plastic........... 0.75 lb. per unit of product Wood $7.00 per ft. Plastic $1.00 per lb. Indirect factory wages Depreciation of plant and equipment $75,000 23,000 Power and light Insurance and property tax 6,000 5,000