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: Estimated sales for January: Bird house 15,000 units at $25 per unit Bird feeder 40,000 units at $15 per unit Estimated inventories at January 1: 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 Desired inventories at January 31: 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 Direct materials used in production: 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 Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $2.50 per ft. Plastic $0.80 per lb. Direct labor requirements: 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. Estimated factory overhead costs for January: Indirect factory wages $40,000 Depreciation of plant and equipment 20,000 Power and light 10,000 Insurance and property tax 5,000 Estimated operating expenses for January: 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 Estimated other revenue and expense for January: Interest revenue $4,540 Interest expense 3,000 Estimated tax rate: 25% Required: 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 $ $ Bird feeder Total revenue from sales $ 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 Units Bird House Bird Feeder 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 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 $ $ $

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: Estimated sales for January: Bird house 15,000 units at $25 per unit Bird feeder 40,000 units at $15 per unit Estimated inventories at January 1: 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 Desired inventories at January 31: 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 Direct materials used in production: 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 Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $2.50 per ft. Plastic $0.80 per lb. Direct labor requirements: 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. Estimated factory overhead costs for January: Indirect factory wages $40,000 Depreciation of plant and equipment 20,000 Power and light 10,000 Insurance and property tax 5,000 Estimated operating expenses for January: 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 Estimated other revenue and expense for January: Interest revenue $4,540 Interest expense 3,000 Estimated tax rate: 25% Required: 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 $ $ Bird feeder Total revenue from sales $ 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 Units Bird House Bird Feeder 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 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 $ $ $

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 3PA: Budgeted income statement and supporting budgets The budget director of Birding Homes Feeders Inc.,...

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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:

Estimated sales for January:

Bird house	15,000 units at $25 per unit
Bird feeder	40,000 units at $15 per unit

Estimated inventories at January 1:

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

Desired inventories at January 31:

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

Direct materials used in production:

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

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

Wood	$2.50 per ft.
Plastic	$0.80 per lb.

Direct labor requirements:

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.

Estimated factory overhead costs for January:

Indirect factory wages	$40,000
Depreciation of plant and equipment	20,000
Power and light	10,000
Insurance and property tax	5,000

Estimated operating expenses for January:

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

Estimated other revenue and expense for January:

Interest revenue	$4,540
Interest expense	3,000

Estimated tax rate: 25%

Required:

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		$	$
Bird feeder
Total revenue from sales			$

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
	Units
		Bird House	Bird Feeder

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
	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	$	$	$

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		×$	×$f
Total direct labor cost		$	$	$

Prepare a factory overhead cost budget for January.

Birding Homes & Feeders Inc. Factory Overhead Cost Budget For the Month Ending January 31
	$



Total factory overhead cost	$

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
			$
		$
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			$

Prepare a selling and administrative expenses budget for January.

Birding Homes & Feeders Inc. Selling and Administrative Expenses Budget For the Month Ending January 31
Selling expenses:
	$


Total selling expenses		$
Administrative expenses:
	$



Total administrative expenses
Total operating expenses		$

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
		$

		$
Operating expenses:
	$

Total operating expenses
Operating income		$
Other revenue and expense:
	$

Income before income tax		$

Net income		$

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