Question

Budgeted income statement and supporting budgets for three months Newport Inc. gathered the following data for use in developing the budgets for the first quarter June, July, August) of its fiscal year: a. Estimated sales at $36 per unit: June 300,000 units July August September 400,000 units 500,000 units 500,000 units b. Estimated finished goods inventories: May 31 June 30 July 31 August 31 16,000 units 5% of next month's sales 5% of next month's sales 5% of next month's sales c. Work in process inventories are estimated to be insignificant (zero) d. Estimated direct materials inventories: May 31 June 30 July 31 August 31 35,000 pounds 40,000 pounds 45,000 pounds 50,000 pounds

Answer 1

Cost of goods Sold Budget
	June	July	August	First Quarter
Beginning Finished Goods Inventory	320000	400000	500000	320000
Cost of Goods manufactured
Direct Materials	1824000	2430000	3000000	7254000
Direct Labor	3040000	4050000	5000000	12090000
Factory Overhead	1686400	1848000	2000000	5534400
Total Cost of Goods manufactured	6550400	8328000	10000000	24878400
Total Cost of Goods available for sale	6870400	8728000	10500000	25198400
Less Ending Inventory	400000	500000	500000	500000
Cost of Goods Sold	6470400	8228000	10000000	24698400

Income Statement
	June	July	August	First Quarter
Sales	10800000	14400000	18000000	43200000
Cost of Goods Sold	6470400	8228000	10000000	24698400
Gross Profit	4329600	6172000	8000000	18501600
Selling and administrative expenses
Selling expenses	1700000	2000000	2300000	6000000
Administrative expenses	550000	550000	550000	1650000
Total Selling and administrative expenses	2250000	2550000	2850000	7650000
Operating Income	2079600	3622000	5150000	10851600

Fixed Selling and administrative expenses are not clearly mentioned whether they are monthly, quarterly and yearly
It has assumed to be monthly