Question

1. Budgeted Income Statement and Supporting Budgets

   The budget director of Feathered Friends 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 December:

   1. Estimated sales for December:

      Bird house	3,200 units at $50 per unit
      Bird feeder	3,000 units at $70 per unit

   2. Estimated inventories at December 1:

      Direct materials:
      Wood	200 ft.
      Plastic	240 lbs.
      Finished products:
      Bird house	320 units at $27 per unit
      Bird feeder	270 units at $40 per unit

   3. Desired inventories at December 31:

      Direct materials:
      Wood	220 ft.
      Plastic	200 lbs.
      Finished products:
      Bird house	290 units at $27 per unit
      Bird feeder	250 units at $41 per unit

   4. Direct materials used in production:

      In manufacture of Bird House:
      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

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

      Wood	$7.00 per ft.
      Plastic	$1.00 per lb.

   6. Direct labor requirements:

      Bird House:
      Fabrication Department	0.20 hr. at $16 per hr.
      Assembly Department	0.30 hr. at $12 per hr.
      Bird Feeder:
      Fabrication Department	0.40 hr. at $16 per hr.
      Assembly Department	0.35 hr. at $12 per hr.

   7. Estimated factory overhead costs for December:

      Indirect factory wages	$75,000
      Depreciation of plant and equipment	23,000
      Power and light	6,000
      Insurance and property tax	5,000

   8. Estimated operating expenses for December:

      Sales salaries expense	$70,000
      Advertising expense	18,000
      Office salaries expense	21,000
      Depreciation expense—office equipment	600
      Telephone expense—selling	550
      Telephone expense—administrative	250
      Travel expense—selling	4,000
      Office supplies expense	200
      Miscellaneous administrative expense	400

   9. Estimated other income and expense for December:

      Interest revenue	$200
      Interest expense	122

   10. Estimated tax rate: 30%

   Required:

   1. Prepare a sales budget for December.

   Feathered Friends Inc. Sales Budget For the Month Ending December 31
   	Unit Sales Volume	Unit Selling Price	Total Sales
   Bird house
   Bird feeder
   Total revenue from sales

   2. Prepare a production budget for December. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

   Feathered Friends Inc. Production Budget For the Month Ending December 31
   	Units
   		Bird House		Bird Feeder

   3. Prepare a direct materials purchases budget for December. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

   Feathered Friends Inc. Direct Materials Purchases Budget For the Month Ending December 31
   	Wood	Plastic	Total
   Required units for production:
   Bird house
   Bird feeder
   Desired units of inventory, December 31
   Total units available
   Estimated units of inventory, December 1
   Total units to be purchased
   Unit price
   Total direct materials to be purchased

   4. Prepare a direct labor cost budget for December.

   Feathered Friends Inc. Direct Labor Cost Budget For the Month Ending December 31
   			Fabrication Department		Assembly Department	Total
   Hours required for production:
   	Bird house
   	Bird feeder
   	Total
   Hourly rate
   Total direct labor cost

   5. Prepare a factory overhead cost budget for December.

   Feathered Friends Inc. Factory Overhead Cost Budget For the Month Ending December 31
   	$
   Total factory overhead cost	$

   6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be $29,000, and work in process at the end of December is estimated to be $35,400. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

   Feathered Friends Inc. Cost of Goods Sold Budget For the Month Ending December 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

   7. Prepare a selling and administrative expenses budget for December.

   Feathered Friends Inc. Selling and Administrative Expenses Budget For the Month Ending December 31
   Selling expenses:
   		$
   Total selling expenses			$
   Administrative expenses:
   		$
   Total administrative expenses
   Total operating expenses			$

   8. Prepare a budgeted income statement for December. In the Other revenue and expense section, indicate expenses as negative amounts.

   Feathered Friends Inc. Budgeted Income Statement For the Month Ending December 31
   			$
   			$
   Operating expenses:
   		$
   Total operating expenses
   Income from operations			$
   Other revenue and expense:
   		$
   Income before income tax			$
   Net income			$

Answer 1

Total sales Saly Budget: units Bird House 3200 Bird feeder 3000 6200 Price 50 70 160000 210000 $370000 production Budget: Bind House 3200 Sales units Add : Closing stock ч: opersong soc Bird Feeder 3000 250 (270) 2980 290 (320) 3170

Material purchase Budget: wood Haterial required Por: Total plastic 1585 (3170X05) Bird House Bird Feeder 2235 2536 (3170X0.8) 3576 (2980x1.2) 8112 (3980x0.75) 3820 200 220 quo) Add: closing stock of на\erias esse opening stock of - Material (200) 3780 165. 6132 Ft. $1 PGibs $7 per fl. $3780 $46704 price purchase valu $42924 Direct labowy cost Budget: Fabrication 634 (3170x0.2) Assembly 95 (3170 X0.3) Bird House lou3 1192 Bird Feeder (980x0.) 1896 ное (2980x0.35 1444 ное $12 rate pen Howr $16 $29216 $2392 Labour cost $531uY Total Direct labour cost

Facton overhead cost Budget! Indirect factory wages Depreciation of plant power and light Insurance & property Tan $75000 23000 6000 5000 & 109oor