Budgeted Income Statement and Supporting BudgetsThe 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 house3,200 units at $50 per unitBird feeder3,000 units at $70 per unitEstimated inventories at December 1:Direct materials:Wood200 ft.Plastic240 lbs.Finished products:Bird house320 units at $27 per unitBird feeder270 units at $40 per unitDesired inventories at December 31:Direct materials:Wood220 ft.Plastic200 lbs.Finished products:Bird house290 units at $27 per unitBird feeder250 units at $41 per unitDirect materials used in production:In manufacture of Bird House:Wood0.80 ft. per unit of productPlastic0.50 lb. per unit of productIn manufacture of Bird Feeder:Wood1.20 ft. per unit of productPlastic0.75 lb. per unit of productAnticipated 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 Department0.20 hr. at $16 per hr.Assembly Department0.30 hr. at $12 per hr.Bird Feeder:Fabrication Department0.40 hr. at $16 per hr.Assembly Department0.35 hr. at $12 per hr.Estimated factory overhead costs for December:Indirect factory wages$75,000Depreciation of plant and equipment23,000Power and light6,000Insurance and property tax5,000Estimated operating expenses for December:Sales salaries expense$70,000Advertising expense18,000Office salaries expense21,000Depreciation expense—office equipment600Telephone expense—selling550Telephone expense—administrative250Travel expense—selling4,000Office supplies expense200Miscellaneous administrative expense400Estimated other income and expense for December:Interest revenue$200Interest expense122Estimated tax rate: 30%7. Prepare a selling and administrative expenses budget for December. Feathered Friends Inc.Selling and Administrative Expenses BudgetFor the Month Ending December 31Selling expenses: $fill in the blank 86 fill in the blank 88 fill in the blank 90 fill in the blank 92 Total selling expenses $fill in the blank 93Administrative expenses: $fill in the blank 95 fill in the blank 97 fill in the blank 99 fill in the blank 101 fill in the blank 103 Total administrative expenses fill in the blank 104Total operating expenses $fill in the blank 105 8. Prepare a budgeted income statement for December. In the Other revenue and expense section, indicate expenses as negative amounts. Feathered Friends Inc.Budgeted Income StatementFor the Month Ending December 31 $fill in the blank 107 fill in the blank 109 $fill in the blank 111Operating expenses: $fill in the blank 113 fill in the blank 115 Total operating expenses fill in the blank 116Income from operations $fill in the blank 117Other revenue and expense: $fill in the blank 119 fill in the blank 121fill in the blank 122Income before income tax $fill in the blank 123 fill in the blank 125Net income $fill in the blank 126

Budget is the estimation of revenue and expenses during a specific period. The selling and…

Answered: Prepare a selling and administrative…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter22: Budgeting

Section: Chapter Questions

Problem 3PB: Budgeted income statement and supporting budgets The budget director of Gold Medal Athletic Co.,...

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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:

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%

7. Prepare a selling and administrative expenses budget for December.

Feathered Friends Inc. Selling and Administrative Expenses Budget For the Month Ending December 31
Selling expenses:
	$fill in the blank 86
	fill in the blank 88
	fill in the blank 90
	fill in the blank 92
Total selling expenses		$fill in the blank 93
Administrative expenses:
	$fill in the blank 95
	fill in the blank 97
	fill in the blank 99
	fill in the blank 101
	fill in the blank 103
Total administrative expenses		fill in the blank 104
Total operating expenses		$fill in the blank 105

8. Prepare a budgeted income statement for December. In the Other revenue and expense section, indicate expenses as negative amounts.

Feathered Friends Inc. Budgeted Income Statement For the Month Ending December 31
		$fill in the blank 107
		fill in the blank 109
		$fill in the blank 111
Operating expenses:
	$fill in the blank 113
	fill in the blank 115
Total operating expenses		fill in the blank 116
Income from operations		$fill in the blank 117
Other revenue and expense:
	$fill in the blank 119
	fill in the blank 121	fill in the blank 122
Income before income tax		$fill in the blank 123
		fill in the blank 125
Net income		$fill in the blank 126

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Bird house	3,200 units at $50 per unit
Bird feeder	3,000 units at $70 per unit

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

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

Indirect factory wages	$75,000
Depreciation of plant and equipment	23,000
Power and light	6,000
Insurance and property tax	5,000

Interest revenue	$200
Interest expense	122