| Online teaching and learing nesource teom Cengage l r earmeng Intemet Exploer
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| Online teaching and learing nesource teom Cengage l r earmeng Intemet Exploer ter 6 Homework udgcted Income Statement and Supporting Budgets he budget director of Feathered Friends Inc., with the assistance of the eBook controller, treasures, production manager, and sales manages, has gathered e following data for use in developing the budgeted income statement for December 2016: a. Estimated sales for December: 3,200 units at $50 per unit 3,000 units at $70 per unit Bird house Bird feedor b. Estimated inventorkes at December 1 Direct materials: Wood 200 ft. Plastk 240 Ibs. Finished products 320 units at $27 per unit 270 units at $40 per unit Bird house Bird feeder c. Desired inventories at December 31Explanation / Answer
Feathered Friend Incorporatio Sales Budget for the month ending December 31 2016 Unit sales value Unit selling price Total sales Birds house 32,000 $50 $1,600,000 Birds Feeder 30,000 $70 $2,100,000 Total revenues from sale 62,000 $3,700,000 Feather Friend Incorporation Production Budget For the month ending Dec 31 2016 Birds House Birds Feeder Expected units to be sold 32,000 30,000 Plus Desired Inventory Dec 31 2014 290 250 Total 32,290 30,250 Less Estimated Inventory Dec 1 2014 320 270 Total units produced 31,970 29,980 Feathered Friend Incorporation Direct materials Purchase Budget For the month ending Dec 31 2016 Wood Plastic Total Required units for production 31,970 29,980 61,950 Bird house x0.80ft=25,576 x0.50lb=14,990 40,566 Bird feeder x1.20ft=38,364 x0.75 lb=22,485 60,849 Plus desired inventory Dec 31,2014 = 220 = 200 420 Total =64,160 =37,675 101,835 Less: Estimated units of Dec 1,2014 = 200 = 240 440 Total units to be purchased = 63,960 =37,435 101,395 Unit price =$7 =$1 Total direct materials to be purchased =$447,720 = $37,435 $485,155 4. Feathered friend incorporation Direct labor cost Budget for the month ending December 31, 2016 Fabrication Assembly Total Department Department Hours required for production Birds House 31,970x0.2=6,394 31,970x0.3 = 9,591 Birds feeder 29,980x0.4=11,992 29,980x0.35=10,493 Total =18,386 =20,084 38,470 Hourly rates =$16 =$12 Total direct labor cost =$294,176 =$241,008 $535,184 5. Feathered Friend Incorporation Factory Overhead Budget for the month ending on Dec31 2016 Indirect Factory wages $75,000 Depreciation of Plant & Machineries $23,000 Power and Light $6,000 Insurance & property Tax $5,000 Total $109,000 6. Feathered Friend Incorporation Cost of goods sold budget for the period ending on 31st December 2016 Finished goods inventory Dec 1 2014 $19,440 Work in progress inventory Dec1 2014 nil Direct materials Direct material inventory Dec 1 2014 $1,640 Direct material purchased $485,155 Cost of direct material available for use $486,795 Less: Direct material inventory December 31 $1,740 Cost of direct material placed in production $485,055 Direct labor $535,184 Factory overhead $109,000 Total manufacturing cost $1,129,239 Total W.I.P. during the period $1,129,239l Less: WIP invetory Dec 31 2014 nil Cost of goods manufactured $1,129,239 Cost of goods available for sale $1,148,679 Less: Finished goods inventory on Dec31 2014 $18,080 Cost of goods sold $1,130,599 7. Feathered Friend Incorporation Selling & Administrative Expenses Budget for the month ending on Dec 31 2016 Selling expenses: Sales salary expenses $70,000 Advertisement expenses $18,000 Telephone expenses - selling $550 Travel expenses - selling $4,000 Total selling expenses $92,550 $92,550 Administrative expenses: Office salary expenses $21,000 Depreciation expenses - office equipments $600 Telephone expenses - administration $250 Office supplies expenses $200 Miscellaneous Administrative expenses $400 Total administrative expenses $22,450 $22,450 Total operating expenses $115,000 Feathered Friend Incorporation Budgeted Income for the month ending on December 31 2016 Revenues from sales $3,700,000 Cost of goods sold $1,130,599 Gross profit $2,569,401 Operating expenses: Selling expenses $92,550 Administrative expenses $22,450 Total operating expenses $115,000 Income from operation: $2,454,401 Other income Interest revenues $200 Interest expenses $122 $78 Income before tax $2,454,479 Income tax (30%) $736,344 Net income $1,718,135
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