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:
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%
- Prepare a sales budget for December.
- Prepare a production budget for December.
- Prepare a direct materials purchases budget for December.
- Prepare a direct labor cost budget for December.
- Prepare a factory overhead cost budget for December.
- Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be $29,000 and work in process at the end of December is estimated to $35,400.
- Prepare a selling and administrative budget for December.
- Prepare a budgeted income statement for December.
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