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: Estimated sales for January: Birdhouse 6,000 units at $55 per unit Bird feeder 4,500 units at $75 per unit Estimated inventories at January 1: 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 Desired inventories at January 31: 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 Direct materials used in production: 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 Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $8.00 per ft. Plastic $1.20 per lb. Direct labor requirements: 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. Estimated factory overhead costs for January: Indirect factory wages $80,000 Depreciation of plant and equipment 25,000 Power and light 8,000 Insurance and property tax 2,000 Estimated operating expenses for January: 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 Estimated other income and expense for January: Interest revenue $300 Interest expense 224 Estimated tax rate: 30% Required: 1. Prepare a sales budget for January. Birds of a Feather Inc.Sales BudgetFor the Month Ending January 31 Unit SalesVolume Unit SellingPrice Total Sales Birdhouse Bird feeder Total revenue from sales $ 2. Prepare a production budget for January. Birds of a Feather Inc.Production BudgetFor the Month Ending January 31 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 BudgetFor the Month Ending January 31 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 BudgetFor the Month Ending January 31 FabricationDepartment 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 BudgetFor the Month Ending January 31 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 BudgetFor 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 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 BudgetFor the Month Ending January 31 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 StatementFor the Month Ending January 31 Selling and administrative expenses: Total selling and administrative expenses Other revenue: Other expenses: $

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: Estimated sales for January: Birdhouse 6,000 units at $55 per unit Bird feeder 4,500 units at $75 per unit Estimated inventories at January 1: 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 Desired inventories at January 31: 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 Direct materials used in production: 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 Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $8.00 per ft. Plastic $1.20 per lb. Direct labor requirements: 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. Estimated factory overhead costs for January: Indirect factory wages $80,000 Depreciation of plant and equipment 25,000 Power and light 8,000 Insurance and property tax 2,000 Estimated operating expenses for January: 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 Estimated other income and expense for January: Interest revenue $300 Interest expense 224 Estimated tax rate: 30% Required: 1. Prepare a sales budget for January. Birds of a Feather Inc.Sales BudgetFor the Month Ending January 31 Unit SalesVolume Unit SellingPrice Total Sales Birdhouse Bird feeder Total revenue from sales $ 2. Prepare a production budget for January. Birds of a Feather Inc.Production BudgetFor the Month Ending January 31 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 BudgetFor the Month Ending January 31 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 BudgetFor the Month Ending January 31 FabricationDepartment 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 BudgetFor the Month Ending January 31 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 BudgetFor 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 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 BudgetFor the Month Ending January 31 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 StatementFor the Month Ending January 31 Selling and administrative expenses: Total selling and administrative expenses Other revenue: Other expenses: $

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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Estimated sales for January:

Birdhouse 6,000 units at $55 per unit

Bird feeder 4,500 units at $75 per unit
Estimated inventories at January 1:

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
Desired inventories at January 31:

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

Direct materials used in production:

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

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

Wood $8.00 per ft.

Plastic $1.20 per lb.

Direct labor requirements:

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.

Estimated factory overhead costs for January:

Indirect factory wages $80,000

Depreciation of plant and equipment 25,000

Power and light 8,000

Insurance and property tax 2,000

Estimated operating expenses for January:

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

Estimated other income and expense for January:

Interest revenue $300

Interest expense 224
Estimated tax rate: 30%

Required:

1. Prepare a sales budget for January.

Birds of a Feather Inc. Sales Budget For the Month Ending January 31
	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
	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
	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
		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
	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


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
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



Selling and administrative expenses:


	Total selling and administrative expenses

Other revenue:

Other expenses:



		$

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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

Indirect factory wages	$80,000
Depreciation of plant and equipment	25,000
Power and light	8,000
Insurance and property tax	2,000