Question

Please Solve only Problems 6, 7 and 8

Chapter 22 Homework PR 22-3A Budgeted income statement and supporting budgets OBJ. 4 The budget director of Feathered Friends Inc., with the assistance of the controller, trea- surer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for December 2016: a. Estimated sales for December Bird house.. Bird feeder 3,200 units at 550 per unit 3,000 units at $70 per unit ... b. Estimated inventories at December 1: Direct materials: Finished products: Wood ........ 200 ft Bird house....... 320 units at $27 per unit Plastic........ 240 lbs. Bird feeder....... 270 units at $40 per unit c. Desired inventories at December 31: Direct materials: Finished products: Wood........ 220 ft. Bird house....... 290 units at $27 per unit Plastic. 200 lbs. Bird feeder....... 250 units at $41 per unit d. Direct materials used in production: In manufacture of Bird House: In manufacture of Bird Feeder: Wood ............ 0.80 ft. per unit of product Wood ........... 1.20 ft. per unit of product Plastic............ 0.50 lb, 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: Wood ........................ $7.00 per ft. Plastic................. 51.00 per lb. f. 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 g. Estimated factory overhead costs for December: Indirect factory wages $75,000 Power and light $6,000 Depreciation of plant and equipment 2 3,000 Insurance and property tax 5,000

Answer 1

To calculate 6,7 & 8, information from 1-5 is required.

1. sales Budget Bird House Bird feeder Total revenue from sales Sales Budget Unit sales Volu Unit Selling Pric Total sales 3200 $ 50 $ 160,000 3000 $ 70 $ 210,000 $ 370,000 2. Production Budget Production Budget Bird House Bird feeder Add Expected Units to be sold Desired Inventory, Dec 31 Total Estimated Inventory, Dec 1 Total Units to be produced 3200 290 3490 320 3170 3000 250 3250 270 2980 Less 3. Direct material Purchase Budget Total 25361 Direct material Purchase Budget Wood Plastic Required Units of Production Bird House 1585 Bird feeder 3576 2235 Add Desired units of inventory, Dec 31 220 200 Total 6332 4020 Less Estimated units of inventory, Dec 1 2001 240 Total units to be purchased 6132 3780 Multiply Unit Price 7.00 $ 1.00 Total Direct material to be purchased $ 42,924 $ 3,780 $ $ 46,704 Working of Required Units of Production | Bird House Bird feeder Wood 3170 x 0.80 2980 x 1.20 Plastic 3 170 x 0.50 2980 x 0.75 4.Direct Labor Cost Budget Direct Labor Cost Budget Fabrication Dep Assembly Dept Total Hours required for production: Bird House 634 951 Bird feeder 1192 1 043 Total 1826 1994 Hourly Rate $ 16.00 $ 12.00 Total direct labor cost 29,216 $ 23,928 $ 53,144 Working of Hours required for ProductioFabrication Dept Assembly Dept Bird House 3170 x 0.20 3170 x 0.30 Bird feeder 2980 x 0.40 2980 x 0.35 5. Factory Overhead Cost Budget Factory Overhead Cost Budget Indirect Factory Wages Depreciation of Plant & Equipments $ Power & Light $ Insurance & Property Tax $ Total $ 75,000 23,000 6,000 5,000 109,000 6. Cost of Goods Sold Cost of Goods Sold 19,440 (320 x 27) + (270 x 40) given 29,000 (200 x 7) + (240 x 1) calculated above Add less s Finished Goods Inventory, Dec 1 Work In Process Inventory, Dec 1 Direct Material :- Direct Materials Inventory, Dec 1 Direct Material purchased Cost of Direct material Available for use $ Direct Materials Inventory, Dec 31 Cost of Direct Material Placed in Product| $ Direct Labor Factory Overhead $ Total Manufacturing cost Total Work In Process during the period Work In Process Inventory, Dec 31 Cost of Goods Manufactured Cost of finished goods available for sale Finished Goods Inventory, Dec 31 Cost Of Goods Sold 1,640 46,704 48,344 1,740 46,604 53,144 109,000 (220 x 7) + (200 x 1) calculated above calculated above $ $ 208,748 237,748 less $ 35.400 $ given 202,348 221,788 18,080 (290 x 27) + (250 x 41) 203,708 less $ calculate beginning & ending inv of material and finished goods by multiplying units in inv by ccost per unit. 7. Selling & Administrative Budget $ 92,550 Selling & Administrative Expense Selling Expenses: Sales Salaries expenses 70,000 Advertising Expenses 18,000 Telephone Expenses- Selling 550 Travel Expenses-Selling $ 4,000 Total Selling Expenses Administrative Expenses: Office Salaries Expenses $ 21,000 Depreciation expense- office equipm $ 600 Telephone Expenses- administrative 250 Office supplies expense 200 Misc Adm expense 400 Total Adm Expense Total operating Expense $ $ 22,450 115,000 less $ I $ $ 370,000 calculated above 203,708 calculated above 166,292 92,550 22,450 calculated above calculated above 8. Income Statement Income Statement 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 (30%) Net Income $ $ 115,000 51,292 200 122 $ $ $ 78 51,370 15,411 (51,370 x 30%) 35,959