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: Estimated sales for January: Birdhouse 6,000 units at $55 per unit Bird feeder 4,500 units at $75 per unit 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 Desired inventories at January 31: Direct materials: Wood 180 ft. Plastic 210 lb. Finished products: Birdhouse 340 units at $23 per unit Bird feeder 200 units at $34 per unit Direct materials used in production: In manufacture of BirdHouse: 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 Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood $8.00 per ft. Plastic $1.20 per lb. Direct labor requirements: Birdhouse: Fabrication Department 0.20 hr. at $15 per hr. Assembly Department 0.30 hr. at $12 per hr. Bird Feeder: Fabrication Department 0.40 hr. at $15 per hr. Assembly Department 0.35 hr. at $12 per hr. Estimated factory overhead costs for January: Indirect factory wages $80,000 Depreciation of plant and equipment 25,000 Power and light 8,000 Insurance and property tax 2,000 Estimated operating expenses for January: Sales salaries expense $90,000 Advertising expense 20,000 Office salaries expense 18,000 Depreciation expense—office equipment 800 Telephone expense—selling 500 Telephone expense—administrative 200 Travel expense—selling 5,000 Office supplies expense 250 Miscellaneous administrative expense 450 Estimated other income and expense for January: Interest revenue $300 Interest expense 224 Estimated tax rate: 30% Required: 1. Prepare a sales budget for January. Birds of a Feather Inc. Sales Budget For the Month Ending January 31 Unit Sales Volume Unit Selling Price Total Sales Birdhouse Bird feeder Total revenue from sales $ 2. Prepare a production budget for January. Birds of a Feather Inc. Production Budget For the Month Ending January 31 Units Birdhouse Bird Feeder Expected units to be sold Plus desired inventory, January 31 Total Less estimated inventory, January 1 Total units to be produced 3. Prepare a direct materials purchases budget for January. Birds of a Feather Inc. Direct Materials Purchases Budget For the Month Ending January 31 Wood Plastic Total Required units for production: Birdhouse Bird feeder Plus desired units of inventory, January 31 Total Less estimated units of inventory, January 1 Total units to be purchased Unit price $ $ Total direct materials to be purchased $ $ $ 4. Prepare a direct labor cost budget for January. Birds of a Feather Inc. Direct Labor Cost Budget For the Month Ending January 31 Fabrication Department Assembly Department Total Hours required for production: Birdhouse Bird feeder Total Hourly rate $ $ Total direct labor cost $ $ $ 5. Prepare a factory overhead cost budget for January. Birds of a Feather Inc. Factory Overhead Cost Budget For the Month Ending January 31 Indirect factory wages Depreciation of plant and equipment Power and light Insurance and property tax Total $ 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 $35,400. Birds of a Feather Inc. Cost of Goods Sold Budget For the Month Ending January 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 the 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 January. Birds of a Feather Inc. Selling and Administrative Expenses Budget For the Month Ending January 31 Selling expenses: Sales salaries expense Advertising expense Telephone expense—selling Travel expense—selling Total selling expenses Administrative expenses: Office salaries expense Depreciation expense—office equipment Telephone expense—administrative Office supplies expense Miscellaneous administrative expense Total administrative expenses Total operating expenses $ 8. Prepare a budgeted income statement for January. Birds of a Feather Inc. Budgeted Income Statement For the Month Ending January 31 Selling and administrative expenses: Total selling and administrative expenses Other revenue: Other expenses: $

Answer 1

As per HomeworkLib policy first four parts should be addressed.

Part 1

Birds of a Feather Inc.

Sales Budget

For the Month Ending January 31

Product	Unit sales volume	Unit sales price	Total sales
Bird house	6000	55	330000
Bird feeder	4500	75	337500
Total revenue from sales			667500

Part 2

Birds of a Feather Inc.

Production Budget

For the Month Ending January 31

	Units
	Bird house	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

Part 3

Birds of a Feather Inc.

Direct Materials Purchases Budget

For the Month Ending January 31

	Wood (feet)	Plastic (lbs)
Required units for production:
Bird house	4832 (6040*0.80)	3040 (6040*0.50)
Bird feeder	5352 (4460*1.20)	3345 (4460*0.75)
Plus desired inventory, Jan 31	220	250
Total	10404	6635
Less estimated inventory Jan. 1	180	210
Total units to be purchased	10224	6425
Unit price	8	1.20
Total direct materials to be purchased	81792	7710

Part 4

Birds of a Feather Inc.

Direct Labor Cost Budget

For the Month Ending January 31

	Fabrication department	Assembly department
Hours required for production:
Bird house	1208 (6040*0.20)	1812 (6040*0.30)
Bird feeder	1784 (4460*0.40)	1561 (4460*0.35)
Total	2992	3373
Hourly rate	15	12
Total direct labor cost	44880	40476