Budgeted income statement and supporting budipets The budget director of Birding Homes & Feeders 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 15,000 units at $25 per unit Bird feeder 40,000 units at $15 per unit b. Estimated inventories at January 1: Direct materials: Wood 600 ft. Plastic 1,000 lbs. Finished products Bird house 1,000 units at $15 per unit Bird feeder 2,500 units at $8 per unit c. Desired inventories at January 31: Direct materials: Wood 500 ft. Plastic 1,250 lbs. Finished products: Bird house 1,500 units at $15 per unit Bird feeder 3,000 units at $8 per unit d. Direct materials used in production: In manufacture of Bird House Wood 0.80 ft. per unit of product Plastic 0.10 b. per unit of product In manufacture of Bird Feeder: Wood 0.20 ft per unit of product Plastic 1.00 per unit of product 1. Anticipated cost of purchasis and beginning and ending inventory of direct materials: Wood $2.50 per ft. Pastic $0.80 per b 1. Direct labor requirements: Fabrication Department 0.40 hr. at $18 perhe Assembly Department 0.20 hr at $12 per Fabrication Department 0.25 hr at $18 perhe Assembly Department 0.10 h at $12 per p. Estimated factory overhead costs for January Indirect factory wages Depreciation of plant and equipment Power and light Insurance and property tax h. Estimated operating expenses for January Sales salaries expense Advertising expense Office salaries expense Depreciation expense-office equipment Travel expense-seling Office supplies expense $40,000 20,000 10,000 5,000 J. Estimated tax rate: 25% $125,000 80,000 40,000 4,000 25,000 2,500 3,500 Estimated other revenue and expense for January Interest revenue $4,540 3,000
Budgeted income statement and supporting budipets The budget director of Birding Homes & Feeders 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 15,000 units at $25 per unit Bird feeder 40,000 units at $15 per unit b. Estimated inventories at January 1: Direct materials: Wood 600 ft. Plastic 1,000 lbs. Finished products Bird house 1,000 units at $15 per unit Bird feeder 2,500 units at $8 per unit c. Desired inventories at January 31: Direct materials: Wood 500 ft. Plastic 1,250 lbs. Finished products: Bird house 1,500 units at $15 per unit Bird feeder 3,000 units at $8 per unit d. Direct materials used in production: In manufacture of Bird House Wood 0.80 ft. per unit of product Plastic 0.10 b. per unit of product In manufacture of Bird Feeder: Wood 0.20 ft per unit of product Plastic 1.00 per unit of product 1. Anticipated cost of purchasis and beginning and ending inventory of direct materials: Wood $2.50 per ft. Pastic $0.80 per b 1. Direct labor requirements: Fabrication Department 0.40 hr. at $18 perhe Assembly Department 0.20 hr at $12 per Fabrication Department 0.25 hr at $18 perhe Assembly Department 0.10 h at $12 per p. Estimated factory overhead costs for January Indirect factory wages Depreciation of plant and equipment Power and light Insurance and property tax h. Estimated operating expenses for January Sales salaries expense Advertising expense Office salaries expense Depreciation expense-office equipment Travel expense-seling Office supplies expense $40,000 20,000 10,000 5,000 J. Estimated tax rate: 25% $125,000 80,000 40,000 4,000 25,000 2,500 3,500 Estimated other revenue and expense for January Interest revenue $4,540 3,000
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.
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Transcribed Image Text:Budgeted income statement and supporting budgets
The budget director of Birding Homes & Feeders 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:
Bird house 15,000 units at $25 per unit
Bird feeder 40,000 units at $15 per unit
b. Estimated inventories at January 1:
Direct materials:
Wood 600 ft.
Plastic 1,000 lbs.
Finished products:
Bird house 1,000 units at $15 per unit
Bird feeder 2,500 units at $8 per unit
c. Desired inventories at January 31:
Direct materials:
Wood 500 ft.
Plastic 1,250 lbs.
Finished products:
Bird house 1,500 units at $15 per unit
Bird feeder 3,000 units at $8 per unit
d. Direct materials used in production:
In manufacture of Bird House:
Wood 0.80 ft. per unit of product
Plastic 0.10 lb. per unit of product
In manufacture of Bird Feeder:
Wood 0.20 ft. per unit of product
Plastic 1.00 lb. per unit of product
e. Anticipated cost of purchases and beginning and ending inventory of direct materials:
Wood $2.50 per ft. Plastic $0.80 per lib.
f. Direct labor requirements:
Bird House:
Fabrication Department 0.40 hr. at $18 per hr.
Assembly Department 0.20 hr. at $12 per hr.
Bird Feeder:
Fabrication Department 0.25 hr. at $18 par h
Assembly Department 0.10 hr. at $12 par hr
g. Estimated factory overhead costs for January:
Indirect factory wages
Depreciation of plant and equipment
Power and light
Insurance and property tax
h. Estimated operating expenses for January:
Sales salaries expense
$40,000
20,000
10,000
5,000
Interest revenue
Interest expense
J. Estimated tax rate: 25%
$125,000
80,000
40,000
Advertising expense
Office salaries expense
Depreciation expense-office equipment
Travel expense-selling
Office supplies expense
Miscellaneous administrative expense
i. Estimated other revenue and expense for January
$4,540
3,000
4,000
25,000
2,500
3,500
Transcribed Image Text:4. Prepare a direct labor cost budget for January.
Hours required for production:
Bird house
Bird feeder
Total
Hourly rate
Total direct labor cost
5. Prepare a factory overhead cost budget for January
Indirect factory wages
Depreciation of plant and equipment ✔
Power and light ✔
Insurance and property tax ✓
Total factory overhead cost
Finished goods inventory, January 1
Work in process inventory, January 1
Direct materials:
Direct materials inventory, January 1
Direct materials purchases V
Cost of direct materials available for use
BE
Direct materials inventory, January 31
Cost of direct materials placed in production
Direct labor. ✔
Factory overhead
Selling expenses:
✔
Sales salaries expense
Advertising expense ✔
Travel expense-selling -✓
Total selling expenses
6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $9,000, and work in process at the end of January is estimated to be $10,500. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Birding Homes & Feeders Inc.
Factory Overhead Cost Budget
For the Month Ending January 31
✔
Total manufacturing costs
Total work in process during period
Work in process inventory, January 31
Cost of goods manufactured
Cost of finished goods available for sale
Finished goods inventory, January 31 ✓
Cost of goods sold
Administrative expenses:
Office salaries expense ✔
Total operating expenses
7. Prepare a selling and administrative expenses budget for January.
Revenue from sales
Cost of goods sold
Gress profit ✓
Operating expenses:
Selling expenses
Birding Homes & Feeders Inc.
Direct Labor Cost Budget
For the Month Ending January 31
Operating income
Depreciation expense-office equipment
Office supplies expense ✔
Miscellaneous administrative expense ✔
Total administrative expenses
Fabrication
Department
✔
✓
Administrative expenses ✔
Total operating expenses
Yecer o per bang
Other revenue and expense
Interest revenue
Interest expense
Net income
✔
8. Prepare a budgeted income statement for January. In the Other revenue and expense section, indicate expenses as negative amounts.
✔
✔
Income before income tax
Income tax expense ✔
Birding Homes & Feeders Inc.
Cost of Goods Sold Budget
For the Month Ending January 31
✓
✓
✓
✓
Assembly
Department
$
Birding Homes & Feeders Inc.
Selling and Administrative Expenses Budget
For the Month Ending January 31
✓
Total
Birding Homes & Feeders Inc.
www.com
Budgeted Income Statement
For the Month Ending January 31
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