Budgeted Income Statement and Supporting Budgets The budget director of Feathered Friends 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 December: Estimated sales for December: Bird house 3,200 units at $50 per unit Bird feeder 3,000 units at $70 per unit Estimated inventories at December 1: Direct materials: Wood 200 ft. Plastic 240 lbs. Finished products: Bird house 320 units at $27 per unit Bird feeder 270 units at $40 per unit Desired inventories at December 31: Direct materials: Wood 220 ft. Plastic 200 lbs. Finished products: Bird house 290 units at $27 per unit Bird feeder 250 units at $41 per unit Direct materials used in production: In manufacture of Bird House: 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 $7.00 per ft. Plastic $1.00 per lb. 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. Estimated factory overhead costs for December: Indirect factory wages $75,000 Depreciation of plant and equipment 23,000 Power and light 6,000 Insurance and property tax 5,000 Estimated operating expenses for December: Sales salaries expense $70,000 Advertising expense 18,000 Office salaries expense 21,000 Depreciation expense—office equipment 600 Telephone expense—selling 550 Telephone expense—administrative 250 Travel expense—selling 4,000 Office supplies expense 200 Miscellaneous administrative expense 400 Estimated other income and expense for December: Interest revenue $200 Interest expense 122 Estimated tax rate: 30% 4. Prepare a direct labor cost budget for December. Feathered Friends Inc. Direct Labor Cost Budget For the Month Ending December 31 Fabrication Department Assembly Department Total Hours required for production: Bird house fill in the blank 40 fill in the blank 41 Bird feeder fill in the blank 42 fill in the blank 43 Total fill in the blank 44 fill in the blank 45 Hourly rate fill in the blank 46 fill in the blank 47 Total direct labor cost fill in the blank 48 fill in the blank 49 fill in the blank 50 5. Prepare a factory overhead cost budget for December. Feathered Friends Inc. Factory Overhead Cost Budget For the Month Ending December 31 $fill in the blank 52 fill in the blank 54 fill in the blank 56 fill in the blank 58 Total factory overhead cost $fill in the blank 59 6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be $29,000, and work in process at the end of December is estimated to be $35,400. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Feathered Friends Inc. Cost of Goods Sold Budget For the Month Ending December 31 fill in the blank 61 fill in the blank 63 Direct materials: fill in the blank 65 fill in the blank 67 Cost of direct materials available for use fill in the blank 68 fill in the blank 70 Cost of direct materials placed in production fill in the blank 71 fill in the blank 73 fill in the blank 75 Total manufacturing costs fill in the blank 76 Total work in process during period fill in the blank 77 fill in the blank 79 Cost of goods manufactured fill in the blank 80 Cost of finished goods available for sale fill in the blank 81 fill in the blank 83 Cost of goods sold fill in the blank 84
Budgeted Income Statement and Supporting Budgets The budget director of Feathered Friends 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 December: Estimated sales for December: Bird house 3,200 units at $50 per unit Bird feeder 3,000 units at $70 per unit Estimated inventories at December 1: Direct materials: Wood 200 ft. Plastic 240 lbs. Finished products: Bird house 320 units at $27 per unit Bird feeder 270 units at $40 per unit Desired inventories at December 31: Direct materials: Wood 220 ft. Plastic 200 lbs. Finished products: Bird house 290 units at $27 per unit Bird feeder 250 units at $41 per unit Direct materials used in production: In manufacture of Bird House: 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 $7.00 per ft. Plastic $1.00 per lb. 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. Estimated factory overhead costs for December: Indirect factory wages $75,000 Depreciation of plant and equipment 23,000 Power and light 6,000 Insurance and property tax 5,000 Estimated operating expenses for December: Sales salaries expense $70,000 Advertising expense 18,000 Office salaries expense 21,000 Depreciation expense—office equipment 600 Telephone expense—selling 550 Telephone expense—administrative 250 Travel expense—selling 4,000 Office supplies expense 200 Miscellaneous administrative expense 400 Estimated other income and expense for December: Interest revenue $200 Interest expense 122 Estimated tax rate: 30% 4. Prepare a direct labor cost budget for December. Feathered Friends Inc. Direct Labor Cost Budget For the Month Ending December 31 Fabrication Department Assembly Department Total Hours required for production: Bird house fill in the blank 40 fill in the blank 41 Bird feeder fill in the blank 42 fill in the blank 43 Total fill in the blank 44 fill in the blank 45 Hourly rate fill in the blank 46 fill in the blank 47 Total direct labor cost fill in the blank 48 fill in the blank 49 fill in the blank 50 5. Prepare a factory overhead cost budget for December. Feathered Friends Inc. Factory Overhead Cost Budget For the Month Ending December 31 $fill in the blank 52 fill in the blank 54 fill in the blank 56 fill in the blank 58 Total factory overhead cost $fill in the blank 59 6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be $29,000, and work in process at the end of December is estimated to be $35,400. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Feathered Friends Inc. Cost of Goods Sold Budget For the Month Ending December 31 fill in the blank 61 fill in the blank 63 Direct materials: fill in the blank 65 fill in the blank 67 Cost of direct materials available for use fill in the blank 68 fill in the blank 70 Cost of direct materials placed in production fill in the blank 71 fill in the blank 73 fill in the blank 75 Total manufacturing costs fill in the blank 76 Total work in process during period fill in the blank 77 fill in the blank 79 Cost of goods manufactured fill in the blank 80 Cost of finished goods available for sale fill in the blank 81 fill in the blank 83 Cost of goods sold fill in the blank 84
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
The budget director of Feathered Friends 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 December:
- Estimated sales for December:
Bird house 3,200 units at $50 per unit Bird feeder 3,000 units at $70 per unit - Estimated inventories at December 1:
Direct materials: Wood 200 ft. Plastic 240 lbs. Finished products: Bird house 320 units at $27 per unit Bird feeder 270 units at $40 per unit - Desired inventories at December 31:
Direct materials: Wood 220 ft. Plastic 200 lbs. Finished products: Bird house 290 units at $27 per unit Bird feeder 250 units at $41 per unit - Direct materials used in production:
In manufacture of Bird House: 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 $7.00 per ft. Plastic $1.00 per lb. - 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. - Estimated factory
overhead costs for December:Indirect factory wages $75,000 Depreciation of plant and equipment 23,000 Power and light 6,000 Insurance and property tax 5,000 - Estimated operating expenses for December:
Sales salaries expense $70,000 Advertising expense 18,000 Office salaries expense 21,000 Depreciation expense—office equipment 600 Telephone expense—selling 550 Telephone expense—administrative 250 Travel expense—selling 4,000 Office supplies expense 200 Miscellaneous administrative expense 400 - Estimated other income and expense for December:
Interest revenue $200 Interest expense 122 - Estimated tax rate: 30%
4. Prepare a direct labor cost budget for December.
| Feathered Friends Inc. Direct Labor Cost Budget For the Month Ending December 31 |
||||||
|---|---|---|---|---|---|---|
| Fabrication Department |
Assembly Department | Total | ||||
| Hours required for production: | ||||||
| Bird house | fill in the blank 40 | fill in the blank 41 | ||||
| Bird feeder | fill in the blank 42 | fill in the blank 43 | ||||
| Total | fill in the blank 44 | fill in the blank 45 | ||||
| Hourly rate | fill in the blank 46 | fill in the blank 47 | ||||
| Total direct labor cost | fill in the blank 48 | fill in the blank 49 | fill in the blank 50 |
5. Prepare a
| Feathered Friends Inc. Factory Overhead Cost Budget For the Month Ending December 31 |
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|---|---|
|
|
$fill in the blank 52 |
|
|
fill in the blank 54 |
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fill in the blank 56 |
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|
fill in the blank 58 |
| Total factory overhead cost | $fill in the blank 59 |
6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be $29,000, and work in process at the end of December is estimated to be $35,400. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Feathered Friends Inc. Cost of Goods Sold Budget For the Month Ending December 31 |
|||
|---|---|---|---|
|
|
fill in the blank 61 | ||
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|
fill in the blank 63 | ||
| Direct materials: | |||
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fill in the blank 65 | ||
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fill in the blank 67 | ||
| Cost of direct materials available for use | fill in the blank 68 | ||
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|
fill in the blank 70 | ||
| Cost of direct materials placed in production | fill in the blank 71 | ||
|
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fill in the blank 73 | ||
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fill in the blank 75 | ||
| Total manufacturing costs | fill in the blank 76 | ||
| Total work in process during period | fill in the blank 77 | ||
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fill in the blank 79 | ||
| Cost of goods manufactured | fill in the blank 80 | ||
| Cost of finished goods available for sale | fill in the blank 81 | ||
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fill in the blank 83 | ||
| Cost of goods sold | fill in the blank 84 |
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