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%