Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year: a. Estimated sales at $125 per unit: January 25,000 units February 30,000 units March 45,000 units April 50,000 units b. Estimated finished goods inventories: January 1 2,000 units January 31 10% of next month's sales February 28 10% of next month's sales March 31 10% of next month's sales d. Estimated direct materials inventories: January 1 1,000 lbs. January 31 1,500 lbs. February 28 2,000 lbs. March 31 2,500 lbs. e. Manufacturing costs: Per Unit $ 12 60 3 5 Direct materials (0.8 lb. per unit x $15 per Ib.) Direct labor (2.5 hrs. per unit x $24 per hr.) Variable factory overhead ($1.20 per direct labor hour) Fixed factory overhead ($200,000 per month, allocated using 40,000 units) Total per-unit manufacturing costs f. Selling expenses: Variable selling expenses $4 per unit Fixed selling expenses $150,000 Administrative expenses (all fixed costs) $400,000 $80 1. Prepare a sales budget for March. Bellaire Inc. Sales Budget For the First Quarter Ending March 3 February March 30,000 45,000 January 25,000 First Quarter 100,000 Estimated units sold Selling price per unit x$ 125 x$ 125 x$ 125 X$ 125 Total budgeted sales 3,125,000 3,750,000 5,625,000 12,500,000 2. Prepare a production budget for March. Bellaire Inc. Production Budget For the First Quarter Ending March 3 January February 25,000 30,000 March 45,000 5,000 First Quarter 100,000 3,000 4,500 5,000 Estimated units sold Desired ending inventory Total units available for sale Less estimated beginning inventory 28,000 34,500 50,000 105,000 2,000 3,000 4,500 2,000 Total units to be produced 26,000 31,500 45,500 103,000 March 3. Prepare a direct materials purchases budget for March. Bellaire Inc. Direct Materials Purchases Budget For the First Quarter Ending March 31 January February Units to be produced 26,000 31,500 Materials required per unit 0.8 lb. 0.8 lb. Materials required for production 20,800 lbs. 25,200 Ibs. Desired ending inventory 1,500 lbs. 2,000 lbs. 45,500 First Quarter 103,000 0.8 lb. X X 0.8 lb. X 36,400 lbs. 82,400 lbs. 2,500 lbs. 2,500 lbs. 22,300 lbs. 27,200 lbs. 38,900 lbs. 84,900 lbs. 1,000 lbs. 1,000 lbs. 1,500 lbs. 2,000 lbs. Total materials available for use Less estimated beginning inventory Total materials to be purchased Cost per pound 21,300 lbs. 25,700 lbs. 36,900 lbs. 83,900 lbs. 15 X$ 15 X$ 15 X$ 15 X$ 319,500 Cost of direct materials to be purchased 385,500 $ 553,500 1,258,500 4. Prepare a direct labor cost budget for March. Bellaire Inc. Direct Labor Cost Budget For the First Quarter Ending March 31 January February 26,000 31,500 2.5 hrs. 2.5 hrs. March First Quarter 103,000 45,500 X X X 2.5 hrs. X 2.5 hrs. Units to be produced Direct labor required per unit Direct labor hours required for production Direct labor hourly rate 65,000 hrs. 78,750 hrs. 113,750 hrs. 257,500 hrs. X$ 24 X$ 24 X$ 24 X$ 24 Direct labor cost 1,560,000 1,890,000 2,730,000 6,180,000 March First Quarter 5. Prepare a factory overhead cost budget for March. Bellaire Inc. Factory Overhead Cost Budget For the First Quarter Ending March 31 January February Variable factory overhead: Budgeted direct labor hours 65,000 hrs. 78,750 hrs. Variable factory overhead rate 1.2 1.2 Budgeted variable factory overhead 78,000 94,500 Fixed factory overhead: Budgeted fixed factory overhead 200,000 200,000 113,750 hrs. 257,500 hrs. 1.2 X$ X$ x$ 1.2 136,500 309,000 200,000 600,000 Total factory overhead cost 278,000 294,500 336,500 909,000 6. Prepare a cost of goods sold budget for March. Bellaire Inc. Cost of Goods Sold Budget For the First Quarter Ending March 31 January February 160,000 240,000 March First Quarter 160,000 360,000 Beginning finished goods inventory Cost of goods manufactured: Direct materials Direct labor Factory overhead 312,000 546,000 378,000 1,890,000 | 7 1,236,000 6,180,000 1,560,000 2,730,000 > 208,000 X 252,000 X 364,000 X 824,000 X 2,080,000 X 2,520,000 X $ 3,640,000 X 8,240,000 x Total cost of goods manufactured Cost of finished goods available for sale Ending finished goods inventory 2,240,000 X 2,760,000 X $4,000,000 X 8,400,000 X 240,000 360,000 400,000 400,000 Cost of goods sold 2,000,000 X 2,400,000 X 3,600,000 X 8,000,000 X 7. Prepare a selling and administrative expenses budget for March. Enter all amounts as positive number. Bellaire Inc. Selling and Administrative Expenses Budget For the First Quarter Ending March 31 January February March Selling expenses: Budgeted sales units 25,000 30,000 45,000 Variable selling expenses per unit sold X$ X$ X$ First Quarter 100,000 X$ 4 100,000 $ 120,000 180,000 400,000 Total variable selling expenses Fixed selling expenses 150,000 150,000 150,000 450,000 250,000 270,000 330,000 850,000 Total selling expenses Administrative expenses: Budgeted fixed administrative expenses 400,000 400,000 400,000 1,200,000 Total selling and administrative expenses 650,000 670,000 730,000 2,050,000 March 5,625,000 First Quarter 12,500,000 8. Prepare a budgeted income statement with budgeted operating income for March. Bellaire Inc. Budgeted Income Statement For the First Quarter Ending March 31 January February Sales 3,125,000 3,750,000 Cost of goods sold 2,000,000 x 2,400,000 X Gross profit 1,125,000 X $ 1,350,000 X Selling and administrative expenses: Selling expenses 250,000 270,000 Administrative expenses 400,000 400,000 3,600,000 X 8,000,000 X 2,025,000 X 4,500,000 X 330,000 850,000 400,000 1,200,000 Total selling and administrative expenses 650,000 $ 670,000 730,000 2,050,000 Operating income 475,000 X $ 680,000 X 1,295,000 X $ 2,450,000 X