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% a. 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 $ b. 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 $ c. 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
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% a. 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 $ b. 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 $ c. 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
100%
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 equipment25,000 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%
a. Prepare a
| 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 | $ |
b. 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 | $ |
c. 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 | $ |
d. 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: | |||
| $ |
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