Question

only use information for the Birdhouse.  This changes some dollar figures in the Cost of Goods Sold Budget. The cost of the ending inventory Birdhouse will be $32 x 340 birdhouses

Beginning Finished goods inventory $7,820 Ending FG inventory $10,880

Beginning WIP $14,500 Ending WIP $17,700

Chapter 22 Budgeting 1113 c. Desired inventories at January 31: Direct materials: Wood Plastic... . . . 32 Finished products: 340 units at $28per unit Y& 200 units at $34 per unit 180 ft. Birdhouse 210 lb. Bird feeder..... d. Direct materials used in production: In manufacture of Birdhouse: Wood.. . . In manufacture of Bird Feeder: 0.80 ft. per unit of product 0.50 lb. per unit of product Wood ..1.20 ft. per unit of product Plastic.. . 0.75 lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic.. Wood $8.00 per ft. Plastic.. ciscesccct $1.20 per lb. f. Direct labor requirements: Birdhouse: Fabrication Department 0.20 hr. at $15 per hr. 0.30 hr. at $12 per hr. Assembly Department. Bird Feeder: Fabrication Department 0.40 hr. at $15 per hr. 0.35 hr. at $12 per hr. Assembly Department. g. Estimated factory overhead costs for January: $8,000 Power and light Indirect factory wages $80,000 2,000 Insurance and property tax Depreciation of plant and equipment 25,000 h. Estimated operating expenses for January: $90,000 Sales salaries expense 20,000 Advertising expense Office salaries expense 18,000 800 Depreciation expense-office equipment 500 Telephone expense-selling 200 Telephone expense-administrative Travel expense-selling Office supplies expense Miscellaneous administrative expense 5,000 250 450 i. Estimated other income and expense for January: $300 Interest revenue 224 Interest expense j. Estimated tax rate: 30% Instructions 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 $45,400 17.1 S0O 7. Prepare a selling and administrative expenses budget for January 8. Prepare a budgeted income statement for January

Answer 1

1. sales Budget Bird House Bird feeder Total revenue from sales Sales Budget Unit sales Volume Unit Selling Price Total sales 6000 $ 55 $ 330,000 45000 $ 75 $ 337,500 $ 667,500 2. Production Budget Production Budget Bird House Bird feeder Add Expected Units to be sold Desired Inventory, Jan 31 Total Estimated Inventory, Jan 1 Total Units to be produced 6000 3401 6340 300 6040 | 20 4500 200 4700 240 4460 Less 3. Direct material Purchase Budget Direct material Purchase Budget Wood Plastic Total Add Required Units of Production Bird House Bird feeder Desired units of inventory, Jan 31 Total Estimated units of inventory, Jan 1 Total units to be purchased Unit Price Total Direct material to be purchased 4832 5352 180 10364 220 10144 8.00 81,152 3020 3345 210 6575 250 6325 1.20 7,590 Less Multiply $ $ $ $ $ 88,742 Working of Required Units of Production Bird House Bird feeder Wood 6040*0.8 4460*1.20 Plastic 6040*0.5 4460*0.75 4. Direct Labor Cost Budget Direct Labor Cost Budget Fabrication Dept Assembly Dept Total Hours required for production: Bird House Bird feeder Total Hourly Rate Total direct labor cost 1208| 1784 2992 15.00 44,880 1812 1561 3373 12.00 40,476 $ $ $ $ 85,356 Working of Hours required for Production Bird House Bird feeder Fabrication Dept | Assembly Dept 6040*0.2 6040*0.3 4460*0.40 4460*0.35 5. Factory Overhead Cost Budget Factory Overhead Cost Budget Indirect Factory Wages Depreciation of Plant & Equipments Power & Light Insurance & Property Tax Total 80,000 25,000 8,000 2,000 115,000 $

6. Cost of Goods Sold Cost of Goods Sold s 15.060 (300*23)+(240*34) given 14,500 $ (220*8)+(250*1.2) calculated above Add less Finished Goods Inventorv. Jan 1 L Work In Process Inventory, Jan 1 Direct Material :- Direct Materials Inventory, Jan 1 Direct Material purchased Cost of Direct material Available for use Direct Materials Inventory, Jan 31 Cost of Direct Material Placed in Production Direct Labor Factory Overhead Total Manufacturing cost Total Work In Process during the period Work In Process Inventory, Jan 31 Cost of Goods Manufactured Cost of finished goods available for sale Finished Goods Inventory, Jan 31 Cost Of Goods Sold 2,060 88,742 90,802 1,692 89,110 85,356 115,000 (180*8)+(210*1.2) $ $ calculated above calculated above $ 289.466 303,966 17.700 less $ $ $ given 286,266 301,326 17,680 (340*32)+(200*34) 283,646 less 7 In in

7. Selling & Administrative Budget 90,000 20,000 500 5,000 $ 115,500 Selling & Administrative Expense Selling Expenses: Sales Salaries expenses $ Advertising Expenses $ Telephone Expenses- Selling $ Travel Expenses-Selling $ Total Selling Expenses Administrative Expenses: Office Salaries Expenses $ Depreciation expense- office equipment Telephone Expenses-administrative Office supplies expense Misc Adm expense $ Total Adm Expense Total operating Expense 18,000 800 200 250 450 $ $ 19.700 135,200 8. Income Statement Income Statement less 667,500 calculated above 283,646 calculated above 383,854 $ $ $ 115,500 19,700 calculated above calculated above $ Revenue From Sales Cost of Goods Sold Gross Profit Operating Expense: Selling Expense Administrative Expense Total operating Expense Income from Operation Other Income: Interest Revenue Other Expense: Interest Expense Income Before Income Tax Income Tax Expense (25%) Net Income 135,200 248,654 300 $ 224 $ 76 248,730 74,619 174,111 (248730 * 30%)