Chapter 8, Problem 4PA

Budgeted income statement and supporting budgets for three months

Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year:

Estimated sales at $125 per unit:

Estimated finished goods inventories:

Work in process inventories are estimated to be insignificant (zero).

Estimated direct materials inventories:

Manufacturing costs:

Selling expenses:

Instructions

Prepare the following budgets using one column for each month and a total column for the first quarter, as shown for the sales budget:

Prepare a sales budget for March.

Prepare a production budget for March.

Prepare a direct materials purchases budget for March.

Prepare a direct labor cost budget for March.

Prepare a factory overhead cost budget for March.

Prepare a cost of goods sold budget for March.

Prepare a selling and administrative expenses budget for March.

Prepare a budgeted income statement with budgeted operating income for March.