In: Accounting
Budgeted Income Statement and Supporting Budgets
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:
Birdhouse | 6,000 units at $55 per unit |
Bird feeder | 4,500 units at $75 per unit |
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 |
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 |
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 |
Wood | $8.00 per ft. |
Plastic | $1.20 per lb. |
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. |
Indirect factory wages | $80,000 |
Depreciation of plant and equipment | 25,000 |
Power and light | 8,000 |
Insurance and property tax | 2,000 |
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 |
Interest revenue | $300 |
Interest expense | 224 |
Required:
1. Prepare a sales budget for January.
Birds of a Feather Inc. Sales Budget For the Month Ending January 31 |
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Unit Sales Volume |
Unit Selling Price |
Total Sales | |
Birdhouse | |||
Bird feeder | |||
Total revenue from sales | $ |
2. Prepare a production budget for January.
Birds of a Feather Inc. Production Budget For the Month Ending January 31 |
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Units | ||||
Birdhouse | Bird Feeder | |||
Expected units to be sold | ||||
Plus desired inventory, January 31 | ||||
Total | ||||
Less estimated inventory, January 1 | ||||
Total units to be produced |
3. Prepare a direct materials purchases budget for January.
Birds of a Feather Inc. Direct Materials Purchases Budget For the Month Ending January 31 |
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---|---|---|---|
Wood | Plastic | Total | |
Required units for production: | |||
Birdhouse | |||
Bird feeder | |||
Plus desired units of inventory, January 31 | |||
Total | |||
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 of a Feather Inc. Direct Labor Cost Budget For the Month Ending January 31 |
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Fabrication Department |
Assembly Department | Total | ||||
Hours required for production: | ||||||
Birdhouse | ||||||
Bird feeder | ||||||
Total | ||||||
Hourly rate | $ | $ | ||||
Total direct labor cost | $ | $ | $ |
5. Prepare a 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: | |||
Cost of direct materials available for use | |||
Cost of direct materials placed in production | |||
Total manufacturing costs | |||
Total work in process during the 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.
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 expense—selling | |||
Travel expense—selling | |||
Total selling expenses | |||
Administrative expenses: | |||
Office salaries expense | |||
Depreciation expense—office equipment | |||
Telephone expense—administrative | |||
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: | |||
Total selling and administrative expenses | |||
Other revenue: | |||
Other expenses: | |||
$ |