The budget director of Dollie Inc., with the help of the finance department, has compiled the following information for use in creating the budgeted income statement for January 20xx:
a. Estimated sales for January
Luxury dollhouse: 2,000 units at $200 per unit
Standard dollhouse: 3,500 units at $150 per unit
b. Estimated inventories at January 1
Direct materials
Finished products
Plastic: 400 pounds
Luxury dollhouse: 200 units at $98 per unit
Wood: 1,000 pounds
Standard dollhouse: 300 units at $70 per unit
c. Desired inventories at January 31
Direct materials
Finished products
Plastic: 740 pounds
Luxury dollhouse: 170 units at $100 per unit
Wood: 980 pounds
Standard dollhouse: 260 units at $73 per unit
d. Direct materials used in production
To manufacture Luxury dollhouse:
Plastic: 0.8 pounds per unit of product
Wood: 2 pounds per unit of product
To manufacture Standard dollhouse:
Plastic: 0.6 pounds per unit of product
Wood: 1.5 pounds per unit of product
e. Anticipated cost of purchases and beginning and ending inventory of direct materials
Plastic: $5 per pound
Wood: $7 per pound
f. Direct labor requirements
Luxury dollhouse
Molding Department: 0.3 hours at $12 per hour
Assembly Department: 0.5 hours at $10 per hour
Standard dollhouse
Molding Department: 0.2 hours at $12 per hour
Assembly Department: 0.4 hours at $10 per hour
g. Estimated factory overhead costs for January
Indirect factory wages: $95,000
Depreciation of plant and equipment: $20,000
Utilities: $14,000
Insurance and property tax: $4,000
h. Estimated operating expenses for January
Sales salaries expense: $223,600
Advertising expense: $127,000
Office salaries expense: $63,800
Depreciation expense ‘ office equipment: $7,200
Telephone expense ‘ selling: $2,100
Telephone expense ‘ administrative: $550
Travel expense ‘ selling: $40,900
Office supplies expense: $3,500
Miscellaneous administrative expense: $4,600
i. Estimated tax rate: 30%
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