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:

c. Desired inventories at January 31:

d. Direct materials used in production:

e. Anticipated cost of purchases and beginning and ending inventory of direct materials:

Wood . . . . . . . . . . . . $2.50 per ft.

Plastic . . . . . . . . . . . $0.80 per lb.

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 per hr.
Assembly Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10 hr. at $12 per hr.

g. Estimated factory overhead costs for January:

Indirect factory wages........................................................................$40,000

Power and light...................................................................................$10,000

Depreciation of plant and equipment...............................................20,000

Insurance and property tax..................................................................5,000

h. Estimated operating expenses for January:

Sales salaries expense.....................................................................$125,000
Advertising expense.............................................................................80,000
Office salaries expense........................................................................40,000
Depreciation expense—office equipment..........................................4,000
Travel expense—selling......................................................................25,000
Office supplies expense........................................................................2,500
Miscellaneous administrative expense...............................................3,500

i. Estimated other revenue and expense for January:

Interest revenue......................................................................$4,540

Interest expense........................................................................3,000

j. Estimated tax rate: 25%

Instructions

1. Prepare a sales budget for January.

2. Prepare a production budget for January.

3. Prepare a direct materials purchases budget for January.

4. Prepare a direct labor cost budget for January.

5. Prepare a factory overhead cost budget for January.

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.

7. Prepare a selling and administrative expenses budget for January.

8. Prepare a budgeted income statement for January.

Transcribed Image Text:

Direct materials: Finished products: Bird house.. Bird feeder..... 1,000 units at $15 per unit 2,500 units at $8 per unit 600 ft. ..... .. Wood 1,000 Ibs. Plastic...... Direct materials: Finished products: 500 ft. 1,250 Ibs. Bird house....... 1,500 units at $15 per unit Bird feeder..... 3,000 units at $8 per unit Wood ..... ... Plastic........