Budgeted income statement and supporting budgets for three monthsBellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year:a. Estimated sales at $125 per unit:January25,000 unitsFebruary30,000 unitsMarch45,000 unitsApril50,000 unitsb. Estimated finished goods inventories:January 12,000 unitsJanuary 3110% of next month’s salesFebruary 2810% of next month’s salesMarch 3110% of next month’s salesc. Work in process inventories are estimated to be insignificant (zero).d. Estimated direct materials inventories:January 11,000 lbs.January 311,500 lbs.February 282,000 lbs.March 312,500 lbs.

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Asked Oct 15, 2019
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Budgeted income statement and supporting budgets for three months

Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year:

a. Estimated sales at $125 per unit:

January 25,000  units
February 30,000  units
March 45,000  units
April 50,000  units

b. Estimated finished goods inventories:

January 1 2,000  units
January 31 10%  of next month’s sales
February 28 10%  of next month’s sales
March 31 10%  of next month’s sales

c. Work in process inventories are estimated to be insignificant (zero).

d. Estimated direct materials inventories:

January 1 1,000  lbs.
January 31 1,500  lbs.
February 28 2,000  lbs.
March 31 2,500

 lbs.

 

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Expert Answer

Step 1

Prepare a sales budget for March.

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Ineorporation B Sales Budgot Forthe First Quarter Ending March 31 Jaлнary 25,000 x$125 sa125000 Febrary 30,000 x$125 S3.70.0 s5625.000 First Quarter 100,000 $125 $12.500.000 Particulars March Es imated urits seld Selng price par wit Totalbulgeted sales 45.000 x$125

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Step 2

Prepare a production budget for March.

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Incorporation B Production Budget For the First Quarter Ending March 31 January 25,000 3.000 28,000 (2,000) 26,000 First Quarter Particulars February 30,000 4,500 34,500 (3,000) 31,500 March 45,000 5,000 50,000 (4,500) 45,500 Estimated units sold 100,000 Add: Desired ending inventory Total units available for sale Less: Estimated begiming inventory Total units to be produced 5,000 105,000 (2,000) 103,000 Working note for desired ending inventory: Estimated sales of Estimated finis hed Desired ending Month following month (a) goods inventory (b)inventory (c) = (a) x (b) 10% 10% 10% January February 30,000 3,000 45,000 4,500 March 50,000 5,000

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Step 3

Prepare a direct materials purc...

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Incorporation B Direct Materials Purchas es Budget For the First Quarter Ending March 31 February 31,500 x 0.8 lbs Particulars March First Quarter January 26,000 45,500 x0.8 lbs 103,000 Units to be produced Materials required per unit Matenals required for production (in Ibs.) Add: Desired ending inventory (in Ibs.) Total materials available for use (in Ibs.) Less: Estimated beginning inventory (in Ibs.) Total materials to be purchased (in Ibs.) Cost per pound Cost of materials to be purchased x0.8 lbs. x 0.8 lbs 20,800 25,200 2,000 36,400 2,500 82,400 2,500 1,500 27,200 (1,500) 22,300 (1,000) 21,300 x $15 38,900 (2,000) 84,900 (1,000) 83,900 25,700 36,900 x $15 x$15 x $15 319,500 385,500 553,500 1,258,500

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