Budgeted Income Statement and Supporting Budgets The budget director of Gold Medal Athletic Co., 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 March: Estimated sales for March: Batting helmet 1,200 units at $40 per unit Football helmet 6,500 units at $160 per unit Estimated inventories at March 1: Direct materials: Plastic 90 lb. Foam lining 80 lb. Finished products: Batting helmet 40 units at $25 per unit Football helmet 240 units at $77 per unit Desired inventories at March 31: Direct materials: Plastic 50 lb. Foam lining 65 lb. Finished products: Batting helmet 50 units at $25 per unit Football helmet 220 units at $78 per unit Direct materials used in production: In manufacture of batting helmet: Plastic 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50 lb. per unit of product Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic $6.00 per lb. Foam lining $4.00 per lb. Direct labor requirements: Batting helmet: Molding Department 0.20 hr. at $20 per hr. Assembly Department 0.50 hr. at $14 per hr. Football helmet: Molding Department 0.50 hr. at $20 per hr. Assembly Department 1.80 hrs. at $14 per hr. Estimated factory overhead costs for March: Indirect factory wages $86,000 Depreciation of plant and equipment 12,000 Power and light 4,000 Insurance and property tax 2,300 Estimated operating expenses for March: Sales salaries expense $184,300 Advertising expense 87,200 Office salaries expense 32,400 Depreciation expense—office equipment 3,800 Telephone expense—selling 5,800 Telephone expense—administrative 1,200 Travel expense—selling 9,000 Office supplies expense 1,100 Miscellaneous administrative expense 1,000 Estimated other income and expense for March: Interest revenue $940 Interest expense 872 Estimated tax rate: 30% Required: 1. Prepare a sales budget for March. 2. Prepare a production budget for March. Enter all amounts as positive numbers. 3. Prepare a direct materials purchases budget for March. Enter all amounts as positive numbers.

Budgeted Income Statement and Supporting Budgets The budget director of Gold Medal Athletic Co., 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 March: Estimated sales for March: Batting helmet 1,200 units at $40 per unit Football helmet 6,500 units at $160 per unit Estimated inventories at March 1: Direct materials: Plastic 90 lb. Foam lining 80 lb. Finished products: Batting helmet 40 units at $25 per unit Football helmet 240 units at $77 per unit Desired inventories at March 31: Direct materials: Plastic 50 lb. Foam lining 65 lb. Finished products: Batting helmet 50 units at $25 per unit Football helmet 220 units at $78 per unit Direct materials used in production: In manufacture of batting helmet: Plastic 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50 lb. per unit of product Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic $6.00 per lb. Foam lining $4.00 per lb. Direct labor requirements: Batting helmet: Molding Department 0.20 hr. at $20 per hr. Assembly Department 0.50 hr. at $14 per hr. Football helmet: Molding Department 0.50 hr. at $20 per hr. Assembly Department 1.80 hrs. at $14 per hr. Estimated factory overhead costs for March: Indirect factory wages $86,000 Depreciation of plant and equipment 12,000 Power and light 4,000 Insurance and property tax 2,300 Estimated operating expenses for March: Sales salaries expense $184,300 Advertising expense 87,200 Office salaries expense 32,400 Depreciation expense—office equipment 3,800 Telephone expense—selling 5,800 Telephone expense—administrative 1,200 Travel expense—selling 9,000 Office supplies expense 1,100 Miscellaneous administrative expense 1,000 Estimated other income and expense for March: Interest revenue $940 Interest expense 872 Estimated tax rate: 30% Required: 1. Prepare a sales budget for March. 2. Prepare a production budget for March. Enter all amounts as positive numbers. 3. Prepare a direct materials purchases budget for March. Enter all amounts as positive numbers.

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter22: Budgeting

Section: Chapter Questions

Problem 3PB: Budgeted income statement and supporting budgets The budget director of Gold Medal Athletic Co.,...

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Budgeted Income Statement and Supporting Budgets

The budget director of Gold Medal Athletic Co., 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 March:

Estimated sales for March:

Batting helmet 1,200 units at $40 per unit

Football helmet 6,500 units at $160 per unit
Estimated inventories at March 1:

Direct materials:

  Plastic 90 lb.

  Foam lining 80 lb.

Finished products:

  Batting helmet 40 units at $25 per unit

  Football helmet 240 units at $77 per unit
Desired inventories at March 31:

Direct materials:

  Plastic 50 lb.

  Foam lining 65 lb.

Finished products:

  Batting helmet 50 units at $25 per unit

  Football helmet 220 units at $78 per unit

Direct materials used in production:

In manufacture of batting helmet:
Plastic	1.20 lb. per unit of product
Foam lining	0.50 lb. per unit of product
In manufacture of football helmet:
Plastic	3.50 lb. per unit of product
Foam lining	1.50 lb. per unit of product

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

Plastic $6.00 per lb.

Foam lining $4.00 per lb.

Direct labor requirements:

Batting helmet:
Molding Department	0.20 hr. at $20 per hr.
Assembly Department	0.50 hr. at $14 per hr.
Football helmet:
Molding Department	0.50 hr. at $20 per hr.
Assembly Department	1.80 hrs. at $14 per hr.

Estimated factory overhead costs for March:

Indirect factory wages $86,000

Depreciation of plant and equipment 12,000

Power and light 4,000

Insurance and property tax 2,300

Estimated operating expenses for March:

Sales salaries expense	$184,300
Advertising expense	87,200
Office salaries expense	32,400
Depreciation expense—office equipment	3,800
Telephone expense—selling	5,800
Telephone expense—administrative	1,200
Travel expense—selling	9,000
Office supplies expense	1,100
Miscellaneous administrative expense	1,000

Estimated other income and expense for March:

Interest revenue $940

Interest expense 872
Estimated tax rate: 30%

Required:

1. Prepare a sales budget for March.

2. Prepare a production budget for March. Enter all amounts as positive numbers.

3. Prepare a direct materials purchases budget for March. Enter all amounts as positive numbers.

4. Prepare a direct labor cost budget for March.

Gold Medal Athletic Co. Direct Labor Cost Budget For the Month Ending March 31
		Molding Department		Assembly Department	Total
Hours required for production:
Batting helmet	fill in the blank 35	fill in the blank 36
Football helmet	fill in the blank 37	fill in the blank 38
Total hours required	fill in the blank 39	fill in the blank 40
Hourly rate
			$fill in the blank 45

5. Prepare a factory overhead cost budget for March.

6. Prepare a cost of goods sold budget for March. Work in process at the beginning of March is estimated to be $15,300, and work in process at the end of March is desired to be $14,800. Enter all amounts as positive numbers.

7. Prepare a selling and administrative expenses budget for March.

8. Prepare a budgeted income statement for March. Enter all amounts as positive numbers.

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Batting helmet	1,200 units at $40 per unit
Football helmet	6,500 units at $160 per unit

Direct materials:
Plastic	90 lb.
Foam lining	80 lb.
Finished products:
Batting helmet	40 units at $25 per unit
Football helmet	240 units at $77 per unit

Direct materials:
Plastic	50 lb.
Foam lining	65 lb.
Finished products:
Batting helmet	50 units at $25 per unit
Football helmet	220 units at $78 per unit

Indirect factory wages	$86,000
Depreciation of plant and equipment	12,000
Power and light	4,000
Insurance and property tax	2,300