Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 11

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 2016:
a. Estimated sales for December

b. Estimated inventories at December 1:

c. Desired inventories at December 31:

d. Direct materials used in production:

e. Anticipated cost of purchases and beginning and ending inventory of direct materials:

f. Direct labor requirements:

g. Estimated factory overhead costs for December:

h. Estimated operating expenses for December:

i. Estimated other income and expense for December:

j. Estimated tax rate: 30%
Instructions
1. Prepare a sales budget for December.
2. Prepare a production budget for December.
3. Prepare a direct materials purchases budget for December.
4. Prepare a direct labor cost budget for December.
5. Prepare a factory overhead cost budget for December.
6. Prepare a cost of goods sold budge, 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 be $35,400.
7. Prepare a selling and administrative expenses budget for December.
8. Prepare a budgeted income statement for December.