Question

Budgeted income statement and supporting budgets for three months

Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year:

a. Estimated sales at $125 per unit:

January	25,000	units
February	30,000	units
March	45,000	units
April	50,000	units

b. Estimated finished goods inventories:

January 1	2,000	units
January 31	10%	of next month’s sales
February 28	10%	of next month’s sales
March 31	10%	of next month’s sales

c. Work in process inventories are estimated to be insignificant (zero).

d. Estimated direct materials inventories:

January 1	1,000	lbs.
January 31	1,500	lbs.
February 28	2,000	lbs.
March 31	2,500	lbs.

e. Manufacturing costs:

	Per Unit
Direct materials (0.8 lb. per unit × $15 per lb.)	$ 12
Direct labor (2.5 hrs. per unit × $24 per hr.)	60
Variable factory overhead ($1.20 per direct labor hour)	3
Fixed factory overhead ($200,000 per month, allocated using 40,000 units)	5
Total per-unit manufacturing costs	$80

f. Selling expenses:

Variable selling expenses	$4	per unit
Fixed selling expenses	$150,000
Administrative expenses (all fixed costs)	$400,000

1. Prepare a sales budget for March.

Bellaire Inc.
Sales Budget
For the First Quarter Ending March 3
	January	February	March	First Quarter
Estimated units sold
Selling price per unit	x$	x$	x$	x$
Total budgeted sales	$	$	$	$

2. Prepare a production budget for March.

Bellaire Inc.
Production Budget
For the First Quarter Ending March 3
	January	February	March	First Quarter
Total units available for sale
Total units to be produced

3. Prepare a direct materials purchases budget for March.

Bellaire Inc.
Direct Materials Purchases Budget
For the First Quarter Ending March 31
	January	February	March	First Quarter
Units to be produced
Materials required per unit	xlb.	xlb.	xlb.	xlb.
Materials required for production	lbs.	lbs.	lbs.	lbs.
	lbs.	lbs.	lbs.	lbs.
Total materials available for use	lbs.	lbs.	lbs.	lbs.
	lbs.	lbs.	lbs.	lbs.
Total materials to be purchased	lbs.	lbs.	lbs.	lbs.
Cost per pound	x$	x$	x$	x$
Cost of direct materials to be purchased	$	$	$	$

4. Prepare a direct labor cost budget for March.

Bellaire Inc.
Direct Labor Cost Budget
For the First Quarter Ending March 31
	January	February	March	First Quarter
	xhrs.	xhrs.	xhrs.	xhrs.
	hrs.	hrs.	hrs.	hrs.
	x$	x$	x$	x$
	$	$	$	$

5. Prepare a factory overhead cost budget for March.

Bellaire Inc.
Factory Overhead Cost Budget
For the First Quarter Ending March 31
	January	February	March	First Quarter
Variable factory overhead:
	hrs.	hrs.	hrs.	hrs.
	x$	x$	x$	x$
	$	$	$	$
Fixed factory overhead:
Total factory overhead cost	$	$	$	$

6. Prepare a cost of goods sold budget for March.

Bellaire Inc.
Cost of Goods Sold Budget
For the First Quarter Ending March 31
	January	February	March	First Quarter
Beginning finished goods inventory	$	$	$	$
Cost of goods manufactured:
	$	$	$	$
Total cost of goods manufactured	$	$	$	$
	$	$	$	$
	$	$	$	$

7. Prepare a selling and administrative expenses budget for March. Enter all amounts as positive number.

Bellaire Inc.
Selling and Administrative Expenses Budget
For the First Quarter Ending March 31
	January	February	March	First Quarter
Selling expenses:
	x$	x$	x$	x$
Total variable selling expenses	$	$	$	$
Total selling expenses	$	$	$	$
Administrative expenses:
Total selling and administrative expenses	$	$	$	$

8. Prepare a budgeted income statement with budgeted operating income for March.

Bellaire Inc.
Budgeted Income Statement
For the First Quarter Ending March 31
	January	February	March	First Quarter
	$	$	$	$
Gross profit	$	$	$	$
Selling and administrative expenses:
	$	$	$	$
Total selling and administrative expenses	$	$	$	$
	$	$	$	$

Answer 1

1.

Sales Budget
	January	February	March	Total
Sales units	25000	30000	45000	100000
Sales price per unit	$           125.00	$              125.00	$             125.00
Sales amount	$     31,25,000	$        37,50,000	$       56,25,000	$ 1,25,00,000

2.

Production Budget
	January	February	March	Total
Sales units	25000	30000	45000	100000
Add : Closing Stock Required	3000	4500	5000
Total Goods Required	28000	34500	50000	112500
Less : Opening Stock	2000	3000	4500
Production Required	26000	31500	45500	103000

3.

Direct Material Budget
	January	February	March	Total
Production Required	26000	31500	45500	103000
Raw Material Per unit	0.8	0.8	0.8
Raw Material for Production	20800	25200	36400	82400
Add : Closing Stock Required	1500	2000	2500
Total Material Required	22300	27200	38900	88400
Less : Opening Stock	1000	1500	2000
Material to be Purchased	21300	25700	36900	83900
Rate per unit	$             15.00	$                15.00	$               15.00
Cost of Material	$        3,19,500	$          3,85,500	$         5,53,500	$      12,58,500

4.

Direct Labor Budget
	January	February	March	Total
Production Required	26000	31500	45500	103000
Labor hours per unit	2.5	2.5	2.5
Total Labor Hours Required	65000	78750	113750	257500
Labor Rate per hour	$             24.00	$                24.00	$               24.00
Labor Amount	$     15,60,000	$        18,90,000	$       27,30,000	$      61,80,000

As per HOMEWORKLIB RULES we are suppose to answer 4 parts, i have answered 4, so kindly post others separately