Budgeted Income Statement and Supporting Budgets The budget director of Feathered Friends Inc., with the assistance of
Question:
Budgeted Income Statement and Supporting Budgets
The budget director of Feathered Friends 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 December 2016:
Estimated sales for December:
Bird house | 3,200 units at $50 per unit |
Bird feeder | 3,000 units at $70 per unit |
Estimated inventories at December 1:
Direct materials: | |
Wood | 200 ft. |
Plastic | 240 lbs. |
Finished products: | |
Bird house | 320 units at $27 per unit |
Bird feeder | 270 units at $40 per unit |
Desired inventories at December 31:
Direct materials: | |
Wood | 220 ft. |
Plastic | 200 lbs. |
Finished products: | |
Bird house | 290 units at $27 per unit |
Bird feeder | 250 units at $41 per unit |
Direct materials used in production:
In manufacture of Bird House: | |
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 | $7.00 per ft. |
Plastic | $1.00 per lb. |
Direct labor requirements:
Bird House: | |
Fabrication Department | 0.20 hr. at $16 per hr. |
Assembly Department | 0.30 hr. at $12 per hr. |
Bird Feeder: | |
Fabrication Department | 0.40 hr. at $16 per hr. |
Assembly Department | 0.35 hr. at $12 per hr. |
Estimated factory overhead costs for December:
Indirect factory wages | $75,000 |
Depreciation of plant and equipment | 23,000 |
Power and light | $6,000 |
Insurance and property tax | 5,000 |
Estimated operating expenses for December:
Sales salaries expense | $70,000 |
Advertising expense | 18,000 |
Office salaries expense | 21,000 |
Depreciation expense—office equipment | 600 |
Telephone expense—selling | 550 |
Telephone expense—administrative | 250 |
Travel expense—selling | 4,000 |
Office supplies expense | 200 |
Miscellaneous administrative expense | 400 |
Estimated other income and expense for December:
Interest revenue | $200 |
Interest expense | 122 |
Estimated tax rate: 30%
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac