Estimated sales for January: Birdhouse 7.500 units at $66 per unit Bird feeder 5,000 units at $82 per unit Estimated inventories at January 1: Direct Materials: Finished Products: Wood: 198 ft. Birdhouse: 500 units at $28 per unit. Plastic: 420 lbs. Bird feeder: 210 units at $40 per unit. Desired inventories at January 31: Direct Materials: Finished Products: Wood: 220 ft. Birdhouse: 400 units at $28 per unit. Plastic: 340 lbs. Bird feeder: 250 units at $40 per unit. Direct materials used in production: In Mfg. of the Birdhouse: In Mfg. of the Bird Feeder: Wood: 0.80 ft. per unit. 1.20 ft. per unit. Plastic: 0.50 lb. per unit. 0.75 lb. per unit. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood: $9 per ft. Plastic: $1.40 per lb. Direct labor requirements: Birdhouse: Fabrication Department: 0.25 hr. at $20 per hour. Assembly Department: 0.30 hr. at $15 per hour. Bird Feeder: Fabrication Department: 0.40 hr. at $20 per hour. Assembly Department: 0.35 hr. at $15 per hour. Estimated factory overhead costs for January: Indirect Factory Wages: $92,000 Power and Light: $10,100 Depreciation-Plant and Equip.: $34,000 Insurance and Property Tax: $2,800 Estimated operating expenses for January: Sales Salaries Expense: $85,100 Advertising Expense: 17,600 Office Salaries Expense: 19,200 Depreciation Expense-Office Equipment 1,100 Telephone Expense-Selling: 1,000 Telephone Expense-Administrative: 400 Travel Expense-Selling: 3,800 Office Supplies Expense: 350 Miscellaneous Administrative Expense: 250 Estimated other income and expense for January: Interest Revenue: $450 Interest Expense: $294 Estimated tax rate: 25% Instructions Prepare a sales budget for January. Prepare a production budget for January. Prepare a direct materials purchases budget for January. Prepare a direct labor cost budget for January.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
AN: Q6 Q7 Q8
The budget director of Birds and Beyond, Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the
- Estimated sales for January:
Birdhouse 7.500 units at $66 per unit
Bird feeder 5,000 units at $82 per unit
- Estimated inventories at January 1:
Direct Materials: Finished Products:
Wood: 198 ft. Birdhouse: 500 units at $28 per unit.
Plastic: 420 lbs. Bird feeder: 210 units at $40 per unit.
- Desired inventories at January 31:
Direct Materials: Finished Products:
Wood: 220 ft. Birdhouse: 400 units at $28 per unit.
Plastic: 340 lbs. Bird feeder: 250 units at $40 per unit.
- Direct materials used in production:
In Mfg. of the Birdhouse: In Mfg. of the Bird Feeder:
Wood: 0.80 ft. per unit. 1.20 ft. per unit.
Plastic: 0.50 lb. per unit. 0.75 lb. per unit.
- Anticipated cost of purchases and beginning and ending inventory of direct materials:
Wood: $9 per ft. Plastic: $1.40 per lb.
- Direct labor requirements:
Birdhouse:
Fabrication Department: 0.25 hr. at $20 per hour.
Assembly Department: 0.30 hr. at $15 per hour.
Bird Feeder:
Fabrication Department: 0.40 hr. at $20 per hour.
Assembly Department: 0.35 hr. at $15 per hour.
- Estimated factory overhead costs for January:
Indirect Factory Wages: $92,000 Power and Light: $10,100
- Estimated operating expenses for January:
Sales Salaries Expense: $85,100
Advertising Expense: 17,600
Office Salaries Expense: 19,200
Depreciation Expense-Office Equipment 1,100
Telephone Expense-Selling: 1,000
Telephone Expense-Administrative: 400
Travel Expense-Selling: 3,800
Office Supplies Expense: 350
Miscellaneous Administrative Expense: 250
- Estimated other income and expense for January:
Interest Revenue: $450 Interest Expense: $294
- Estimated tax rate: 25%
Instructions
- Prepare a sales budget for January.
- Prepare a production budget for January.
- Prepare a direct materials purchases budget for January.
- Prepare a direct labor cost budget for January.
- Prepare a
factory overhead cost budget for January. - Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $33,600, and work in process at the end of January is estimated to be $41,200.
- Prepare a selling and administrative expenses budget for January.
- Prepare a budgeted income statement for January.
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