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 Bird feeder 200 units at $34 per unit

Answer 1

Birds of a Feather Inc. Sales Budget For the Month Ending January 31 Unit Sales Volume 6000 4500 Unit Selling Price total Sales Bird house Bird feeder Total revenue from sales 75 330000 337500 667500 Birds of a Feather Inc. Production Budget For the Month Ending January 31 Units Bird House Expected units to be sold Plus desired inventory, January 31 Total Less estimated inventory, January 1 Total units to be produced 6000 340 6340 300 60401 Bird Feeder 4500 200 4700 240 4460 Plastic Total Birds of a Feather Inc. Direct Materials Purchases Budget For the Month Ending January 31 Wood Required units for production: Bird house 4832 Bird feeder 5352 Plus desired units of inventory, January 31 180 Total 10364 Less estimated units of inventory, January 1 Total units to be purchased 10144 Unit price Total direct materials to be purchased 81152 3020 3345 210 6575 220 250 6325 1.2 7590 88742 Birds of a Feather Inc. Direct Labor Cost Budget For the Month Ending January 31 Fabrication Department Assembly Department Total Hours required for production: Bird house Bird feeder Total Hourly rate Total direct labor cost 1208 1784 2992 15 44880 1812 1561 3373 40476 85356 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 80000 25000 8000 2000) 115000

Supporting calculations: Birds of a Feather Inc. Cost of Goods Sold Budget For the Month Ending January 31 Units Cost Total 300 23 34 15060 240 6,900 8,160 15,060 29000 340 200 23 7,820 346,800 14,620 Finished goods inventory, Jan. 1 Work in process, Jan. 1 Direct materials: Direct materials inventory, Jan. 1 Direct materials purchases Cost of direct materials available for use Direct materials inventory, Jan. 31 Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during the period Work in process, Jan. 31 Cost of goods manufactured Cost of finished goods available for sale Finished goods inventory, Jan. 31 Cost of goods sold 2060 88742 90802 1692 89110 85356 115000 Finished goods inventory, Jan. 1: Bird house Bird feeder Total Finished goods inventory, Jan. 31 : Bird house Bird feeder Total Direct materials inventory, Jan 1 Wood Plastic Total Direct materials inventory, Jan 31 Wood Plastic Total | 220 250 8.00 1.20 1,760 300 2,060 180 210 8.00 1.20 289466) 318466 35400 283066 298126 14620 283506 1,440 252 1,692

5000 Birds of a Feather Inc. Selling and Administrative Expenses Budget For the Month Ending January 31 Selling expenses: Sales salaries expense 90000 Advertising expense 20000 Telephone expense-selling 500 Travel expense-selling Total selling expenses 115500 Administrative expenses: Office salaries expense 18000 Depreciation expense-office equipment 800 Telephone expense-administrative 200 Office supplies expense Miscellaneous administrative expense 450 Total administrative expenses 19700 Total operating expenses 135200 250 Birds of a Feather Inc. Budgeted Income Statement For the Month Ending January 31 Revenue from sales 667500 Cost of goods sold 283506 Gross profit 383994 Operating expenses: Selling expenses 115500 Administrative expenses 19700 Total operating expenses 135200 Income from operations 248794 Other income: Interest revenue 3001 Other expenses: Interest expense 224 76 Income before income tax 248870 Income tax expense at 30% 74661 Net income 174209