In: Accounting
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:
Bird house | 15,000 units at $25 per unit |
Bird feeder | 40,000 units at $15 per unit |
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 |
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 |
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 |
Wood | $2.50 per ft. |
Plastic | $0.80 per lb. |
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. |
Indirect factory wages | $40,000 |
Depreciation of plant and equipment | 20,000 |
Power and light | 10,000 |
Insurance and property tax | 5,000 |
Sales salaries expense | $125,000 |
Advertising expense | 80,000 |
Office salaries expense | 40,000 |
Depreciation expense—office equipment | 4,000 |
Travel expense—selling | 25,000 |
Office supplies expense | 2,500 |
Miscellaneous administrative expense | 3,500 |
Interest revenue | $4,540 |
Interest expense | 3,000 |
Required:
1. Prepare a sales budget for January.
Birding Homes & Feeders Inc. Sales Budget For the Month Ending January 31 |
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Unit Sales Volume |
Unit Selling Price |
Total Sales | |
Bird house | $ | $ | |
Bird feeder | |||
Total revenue from sales | $ |
2. Prepare a production budget for January. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Birding Homes & Feeders Inc. Production Budget For the Month Ending January 31 |
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---|---|---|---|---|
Units | ||||
Bird House | Bird Feeder | |||
3. Prepare a direct materials purchases budget for January. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Birding Homes & Feeders Inc. Direct Materials Purchases Budget For the Month Ending January 31 |
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---|---|---|---|
Wood | Plastic | Total | |
Required units for production: | |||
Bird house | |||
Bird feeder | |||
Desired units of inventory, January 31 | |||
Total units available | |||
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.
Birding Homes & Feeders Inc. Direct Labor Cost Budget For the Month Ending January 31 |
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---|---|---|---|---|---|---|
Fabrication Department |
Assembly Department | Total | ||||
Hours required for production: | ||||||
Bird house | ||||||
Bird feeder | ||||||
Total | ||||||
Hourly rate | ×$ | ×$ | ||||
Total direct labor cost | $ | $ | $ |
5. Prepare a factory overhead cost budget for January.
Birding Homes & Feeders Inc. Factory Overhead Cost Budget For the Month Ending January 31 |
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---|---|---|
$ | ||
Total factory overhead cost | $ |
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.
Birding Homes & Feeders Inc. Cost of Goods Sold Budget For the Month Ending January 31 |
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---|---|---|---|
$ | |||
$ | |||
Direct materials: | |||
$ | |||
Cost of direct materials available for use | $ | ||
Cost of direct materials placed in production | $ | ||
Total manufacturing costs | |||
Total work in process during period | $ | ||
Cost of goods manufactured | |||
Cost of finished goods available for sale | $ | ||
Cost of goods sold | $ |
7. Prepare a selling and administrative expenses budget for January.
Birding Homes & Feeders Inc. Selling and Administrative Expenses Budget For the Month Ending January 31 |
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---|---|---|---|
Selling expenses: | |||
$ | |||
Total selling expenses | $ | ||
Administrative expenses: | |||
$ | |||
Total administrative expenses | |||
Total operating expenses | $ |
8. Prepare a budgeted income statement for January. In the Other revenue and expense section, indicate expenses as negative amounts.
Birding Homes & Feeders Inc. Budgeted Income Statement For the Month Ending January 31 |
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---|---|---|---|
$ | |||
$ | |||
Operating expenses: | |||
$ | |||
Total operating expenses | |||
Operating income | $ | ||
Other revenue and expense: | |||
$ | |||
Income before income tax | $ | ||
Net income | $ |
1.
Birding Homes and Feedesr Inc. Sales Budget For The Month Ending January 31 |
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Unit sales volume | Unit selling price | Total sales | |
Bird house | 15,000 | $25 | $375,000 |
Bird feeder | 40,000 | $15 | $600,000 |
Total revenue from sales | $975,000 |
2.
Birding Homes and Feedesr Inc. Production Budget For The Month Ending January 31 |
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Bird House | Bird Feeder | |
Estimated sales | 15,000 | 40,000 |
Add: Desired ending inventory | 1,500 | 3,000 |
Total needs | 16,500 | 43,000 |
Less: Beginning inventory | (1,000) | (2,500) |
Estimated production | 15,500 | 40,500 |
3.
Birding Homes and Feedesr Inc. Direct Material Purchases Budget For The Month Ending January 31 |
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Wood | Plastic | Total | |
Required units for production: | |||
Bird House | 12,400 (15,500*0.80) | 1,550 (15,500*0.10) | |
Bird Feeder | 8,100 (40,500*0.20) | 40,500 (40,500*1) | |
Add:Desired units of inventory, January 31 | 500 | 1,250 | |
Total units available | 21,000 | 43,300 | |
Estimated units of inventory, January 1 | (600) | (1,000) | |
Total units to be purchased | 20,400 | 42,300 | |
Unit price | $2.50 | $0.80 | |
Total direct material to be purchased | $51,000 | $33,840 | $84,840 |
4.
Birding Homes and Feedesr Inc. Direct Labor Cost Budget For The Month Ending January 31 |
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Fabrication | Assembly | Total | |
Hours required for production: | |||
Bird House | 6,200 (15,500*0.40) | 3,100 (15,500*0.20) | |
Bird Feeder | 10,125 (40,500*0.25) | 4,050 (40,500*0.10) | |
Total | 16,325 | 7,150 | |
Hourly rate | $18 | $12 | |
Total direct labor cost | $293,850 | $85,800 | $379,650 |