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Budgeted Income Statement and Supporting Budgets The budgetdirector of Feathered Friends Inc., with the assistance of thecontroller, treasurer, production manager, and sales manager, hasgathered the following data for use in developing the budgetedincome statement for December 2016: 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 320units at $27 per unit Bird feeder 270 units at $40 per unit Desiredinventories at December 31: Direct materials: Wood 220 ft. Plastic200 lbs. Finished products: Bird house 290 units at $27 per unitBird feeder 250 units at $41 per unit Direct materials used inproduction: In manufacture of Bird House: Wood 0.80 ft. per unit ofproduct Plastic 0.50 lb. per unit of product In manufacture of BirdFeeder: Wood 1.20 ft. per unit of product Plastic 0.75 lb. per unitof product Anticipated cost of purchases and beginning and endinginventory of direct materials: Wood $7.00 per ft. Plastic $1.00 perlb. Direct labor requirements: Bird House: Fabrication Department0.20 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 factoryoverhead costs for December: Indirect factory wages $75,000Depreciation of plant and equipment 23,000 Power and light $6,000Insurance and property tax 5,000 Estimated operating expenses forDecember: Sales salaries expense $70,000 Advertising expense 18,000Office salaries expense 21,000 Depreciation expense—officeequipment 600 Telephone expense—selling 550 Telephoneexpense—administrative 250 Travel expense—selling 4,000 Officesupplies expense 200 Miscellaneous administrative expense 400Estimated other income and expense for December: Interest revenue$200 Interest expense 122 Estimated tax rate: 30% Required: 1.Prepare a sales budget for December. Feathered Friends Inc. SalesBudget For the Month Ending December 31, 2016 Unit Sales VolumeUnit Selling Price Total Sales Bird house Bird feeder Total revenuefrom sales 2. Prepare a production budget for December. FeatheredFriends Inc. Production Budget For the Month Ending December 31,2016 Units Bird House Bird Feeder Expected units to be sold Plusdesired inventory, December 31, 2016 Total Less estimatedinventory, December 1, 2016 Total units to be produced 3. Prepare adirect materials purchases budget for December. Feathered FriendsInc. Direct Materials Purchases Budget For the Month EndingDecember 31, 2016 Wood Plastic Total Required units for production:Bird house Bird feeder Plus desired units of inventory, December31, 2016 Total Less estimated units of inventory, December 1, 2016Total units to be purchased Unit price Total direct materials to bepurchased 4. Prepare a direct labor cost budget for December.Feathered Friends Inc. Direct Labor Cost Budget For the MonthEnding December 31, 2016 Fabrication Department Assembly DepartmentTotal Hours required for production: Bird house Bird feeder TotalHourly rate Total direct labor cost 5. Prepare a factory overheadcost budget for December. Feathered Friends Inc. Factory OverheadCost Budget For the Month Ending December 31, 2016 Indirect factorywages Depreciation of plant and equipment Power and light Insuranceand property tax Total 6. Prepare a cost of goods sold budget forDecember. Work in process at the beginning of December is estimatedto be $29,000, and work in process at the end of December isestimated to be $35,400. Feathered Friends Inc. Cost of Goods SoldBudget For the Month Ending December 31, 2016 Direct materials:Cost of direct materials available for use Cost of direct materialsplaced in production Total manufacturing costs Total work inprocess during the period Cost of goods manufactured Cost offinished goods available for sale Cost of goods sold 7. Prepare aselling and administrative expenses budget for December. FeatheredFriends Inc. Selling and Administrative Expenses Budget For theMonth Ending December 31, 2016 Selling expenses: Sales salariesexpense Advertising expense Telephone expense—selling Travelexpense—selling Total selling expenses Administrative expenses:Office salaries expense Depreciation expense—office equipmentTelephone expense—administrative Office supplies expenseMiscellaneous administrative expense Total administrative expensesTotal operating expenses 8. Prepare a budgeted income statement forDecember. Feathered Friends Inc. Budgeted Income Statement For theMonth Ending December 31, 2016 Operating expenses: Total operatingexpenses Other income: Other expenses: