Required: 1. Prepare a sales budget for December. Feathered Friends Inc. Sales Budget For the Month Ending December 31 Unit Sales Volume Unit Selling Price Total Sales Bird house fill in the blank 1 fill in the blank 2 fill in the blank 3 Bird feeder fill in the blank 4 fill in the blank 5 fill in the blank 6 Total revenue from sales fill in the blank 7
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.
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 equipment23,000 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%
Required:
1. Prepare a sales budget for December.
| Feathered Friends Inc. Sales Budget For the Month Ending December 31 |
|||
|---|---|---|---|
| Unit Sales Volume |
Unit Selling Price |
Total Sales | |
| Bird house | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 |
| Bird feeder | fill in the blank 4 | fill in the blank 5 | fill in the blank 6 |
| Total revenue from sales | fill in the blank 7 |
2. Prepare a production budget for December. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Feathered Friends Inc. Production Budget For the Month Ending December 31 |
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|---|---|---|---|---|
| Units | ||||
| Bird House | Bird Feeder | |||
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fill in the blank 9 | fill in the blank 10 | ||
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fill in the blank 12 | fill in the blank 13 | ||
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fill in the blank 15 | fill in the blank 16 | ||
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fill in the blank 18 | fill in the blank 19 | ||
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fill in the blank 21 | fill in the blank 22 |
3. Prepare a direct materials purchases budget for December. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Feathered Friends Inc. Direct Materials Purchases Budget For the Month Ending December 31 |
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|---|---|---|---|
| Wood | Plastic | Total | |
| Required units for production: | |||
| Bird house | fill in the blank 23 | fill in the blank 24 | |
| Bird feeder | fill in the blank 25 | fill in the blank 26 | |
| Desired units of inventory, December 31 | fill in the blank 27 | fill in the blank 28 | |
| Total units available | fill in the blank 29 | fill in the blank 30 | |
| Estimated units of inventory, December 1 | fill in the blank 31 | fill in the blank 32 | |
| Total units to be purchased | fill in the blank 33 | fill in the blank 34 | |
| Unit price | fill in the blank 35 | fill in the blank 36 | |
| Total direct materials to be purchased | fill in the blank 37 | fill in the blank 38 | fill in the blank 39 |
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