Budgeted Income Statement and Supporting Budgets The budget director of Birds of
ID: 2533062 • Letter: B
Question
Budgeted Income Statement and Supporting Budgets
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:
Estimated inventories at January 1:
Desired inventories at January 31:
Direct materials used in production:
Anticipated cost of purchases and beginning and ending inventory of direct materials:
Direct labor requirements:
Estimated factory overhead costs for January:
Estimated operating expenses for January:
Estimated other income and expense for January:
Estimated tax rate: 30%
Required:
1. Prepare a sales budget for January.
2. Prepare a production budget for January.
3. Prepare a direct materials purchases budget for January.
4. Prepare a direct labor cost budget for January.
5. Prepare a factory overhead cost budget for January.
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.
7. Prepare a selling and administrative expenses budget for January.
8. Prepare a budgeted income statement for January.
Bird house 6,000 units at $55 per unit Bird feeder 4,500 units at $75 per unitExplanation / Answer
(1) Sales Budget for January:-
Sales Volume
SP
Total Sale
Bird House
6000
55
330000
Bird Feeder
4500
75
337500
Total revenue from Sale
667500
(2) Production Budget for January
Bird House
Feeder
Expected units sold
6000
4500
(+)Desired inventory (31 Jan)
340
200
Total
6340
4700
(-)Estimated Inventory (1 Jan)
300
240
Total units to be produced
6040
4460
(3) Direct material Purchase Bdt
Wood
Plastic
Total
Required units for production:-
House
(0.8*6040) =4832
7248
Feeder
2230
3345
(+) Inventory (31 Jan)
180
210
Total
7242
10803
Inventory (1 Jan)
220
250
Total unit purchase
7022
10553
Unit Price
8
1.2
Total DM to be purchased
56176
12663.6
68839.6
(4)
Fabric
Assembaly
total
Hrs for prod:-
House
1208
1812
Feeder
1784
1561
Total
2992
3373
Hr rate
15
12
Total
44880
40476
85356
Sales Volume
SP
Total Sale
Bird House
6000
55
330000
Bird Feeder
4500
75
337500
Total revenue from Sale
667500
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