In: Accounting
Budgeted Income Statement and Supporting Budgets
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 |
|||
---|---|---|---|
Unit Sales Volume |
Unit Selling Price |
Total Sales | |
Bird house | 15,000 | $25.00 | $375,000 |
Bird feeder | 40,000 | 15.00 | 600,000 |
Total revenue from sales | $975,000 |
2. Prepare a production budget for January. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Birding Homes & Feeders Inc. Production Budget For the Month Ending January 31 |
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---|---|---|---|---|
Units | ||||
Bird House | Bird Feeder | |||
Expected units to be sold | 15000 | 40000 | ||
Desired inventory, January 31 | 1500 | 3000 | ||
Total units available | 16500 | 43000 | ||
Estimated inventory, January 1 | ?? | ?? | ||
Total units to be produced | 15500 | 40500 |
3. Prepare a direct materials purchases budget for January. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Birding Homes & Feeders Inc. Direct Materials Purchases Budget For the Month Ending January 31 |
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---|---|---|---|
Wood | Plastic | Total | |
Required units for production: | |||
Bird house | |||
Bird feeder | |||
Desired units of inventory, January 31 | |||
Total units available | |||
Estimated units of inventory, January 1 | |||
Total units to be purchased | |||
Unit price | ×$ | ×$ | |
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 |
||||||
---|---|---|---|---|---|---|
Fabrication Department |
Assembly Department | Total | ||||
Hours required for production: | ||||||
Bird house | ||||||
Bird feeder | ||||||
Total | ||||||
Hourly rate | ×$ | ×$ | ||||
Total direct labor cost | $ | $ | $ |
for formulas and calculations, refer to the image below -
In case you have any query, kindly ask in comments.