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: a. Estimated sales for January: Birdhouse 6,000 units at $55 per unit Bird feeder 4,500 units at $75 per unit b. 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 c. Desired inventories at January 31: Direct materials: Wood 180 ft. Plastic 210 lb. Finished products: Birdhouse 340 units at $23 per unit

Answer 1

1)

Birds of a Feather Inc
Sales Budget
For the month ending January 31
	Unit Sales Volume	Unit Selling Price ($)	Total Sales ($)
Birdhouse	6000	55	330000
Bird Feeder	4500	75	337500
Total Revenue from Sales			667500

2)

Birds of a Feather Inc
Production Budget
For the month ending January 31
		Units
		Birdhouse	Bird Feeder
Expected Units to be sold		6000	4500
Plus Desired Inventory Jan 31		340	200
Total		6340	4700
Less, estimated inventory Jan 1		300	240
Total units to be produced		6040	4460

3)

Birds of a Feather Inc
Direct Materials Purchase Budget
For the month ending January 31
			Wood	Plastic	Total
Required Units for production
Birdhouse			4832	3020
Birdfeeder			5352	3345
Plus Desired units of inventory, Jan 31			180	210
Total			10364	6575
Less estimated units of inventory, Jan 1			220	250
Total Units to be purchased			10144	6325
Unit Price			$              8.00	$              1.20
Total direct materials to be purchased			$         81,152	$           7,590	$ 88,742

Note:
Required units for production:
Wood
Birdhouse	0.80ft per unit x 6040 units = 4832 ft
birdfeeder	1.20 ft per unit x 4460 units = 5352 ft
Plastic
Birdhouse	0.50 lb per unit x 6040 units = 3020 lbs
birdfeeder	0.75 lb per unit x 4460 units = 3345 lbs

4)

Birds of a Feather Inc
Direct Labour Cost Budget
For the month ending January 31
			Fabrication Department	Assembly Department	Total
Hours Required for Production
Bird House			1208	1812
Bird Feeder			1784	1561
Total Hours			2992	3373
Hourly Rate			$            15.00	$           12.00
Total Direct Labour Cost			$         44,880	$         40,476	$ 85,356

Note:
Hours required for production of 6040 birdhouse
Fabrication	0.20 hours per unit x 6040 units = 1208 hours
Assembly	0.30 hours per unit x 6040 units = 1812 hours
Hours required for production of 4460 birdfeeder
Fabrication	0.40 hours per unit x 4460 units = 1784 hours
Assembly	0.35 hours per unit x 4460 units = 1561 hours