The budget director for Bird House Unlimited, Inc., has gathered the following data for use in developing the budgeted income statement for November 20XX.
Estimated sales for November
Bird House 28,600 units at $33 per unit
Bird Feeder 24,000 units at $37 per unit
Direct materials
Estimated inventories at November 1(beginning)
Wood 2600 feet
Plastic 3200 pounds
Estimated inventories at November 30th(ending)
Wood 3500 feet
Plastic 2800 pounds
Direct materials used in production:
In the manufacture of a Bird House:
Wood 0.80 feet per unit of product
Plastic 0.50 pounds per unit of product
In the manufacture of a Bird Feeder:
Wood 1.20 feet per unit of product
Plastic 0.70 pounds per unit of product
Estimated cost of direct materials
Wood $6.00 per feet
Plastic $0.80 per pound
Work in process-given in total of the 2 products
Estimated inventories at November 1(beginning) $2,000
Estimated inventories at November 30th(ending) $3,000
Finished Goods
Estimated inventories at November 1(beginning)
Bird House 4,000 units at $13 per unit
Bird Feeder 2,500 units at $14 per unit
Estimated inventories at November 30th(ending)
Bird House 5,000 units at $13 per unit
Bird Feeder 2,000 units at $14 per unit
Direct Labor Requirements:
Bird House
Fabrication Department 0.25 hour at $14 per hour
Assembly Department 0.3 hour at $11 per hour
Bird Feeder
Fabrication Department 0.45 hour at $14 per hour
Assembly Department 0.35 hour at $11 per hour
Objectives
1. Develop operating budgets
2. Analyze the cash flow of the company.
3. Analyze how changes in cost or revenue impact the budgets.
4. Provide recommendations to management.
Questions :
1. Prepare a sales budget for November
2. Prepare a production budget for November.
3. Prepare a supporting schedule to determine required material for production and a direct materials purchase budget for November
4. Prepare a direct labor cost budget for November.
5. Prepare a factory overhead cost budget for November
6. Prepare a cost of goods sold budget for November.
7. Prepare a selling and administrative budget for November, set up based on categorization of expenses into selling and administrative costs.
8. Prepare a budgeted income statement for November.
9. What if the company decides to start a new advertising campaign