The budget director of Jupiter Helmets Inc., 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 May: a. Estimated sales for May: Bicycle helmet 9,500 units at $24 per unit Motorcycle helmet 6,000 units at $180 per unit b. Estimated inventories at May 1: Direct materials: Finished products: Plastic 1,480 lbs. Bicycle helmet 200 units at $15 per unit Foam lining 520 lbs. Motorcycle helmet 100 units at $90 per unit c. Desired inventories at May 31: Direct materials: Finished products: Plastic 2,000 lbs. Bicycle helmet 400 units at $15 per unit Foam lining 800 lbs. Motorcycle helmet 300 units at $100 per unit d. Direct materials used in production: In manufacture of bicycle helmet: Plastic 0.90 lb. per unit of product Foam lining 0.20 lb. per unit of product In manufacture of motorcycle helmet: Plastic 3.50 lbs. per unit of product Foam lining 1.40 lbs. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic $4.40 per lb. Foam lining $0.90 per lb. f. Direct labor requirements: Bicycle helmet: Molding Department 0.30 hr. at $15 per hr. Assembly Department 0.10 hr. at $14 per hr. Motorcycle helmet: Molding Department 0.50 hr. at $15 per hr. Assembly Department 0.40 hr. at $14 per hr. g. Estimated factory overhead costs for May: Indirect factory wages $125,000 Power and light $23,000 Depreciation of plant and equipment 45,000 Insurance and property tax 11,000 h. Estimated operating expenses for May: Sales salaries expense $175,000 Advertising expense 120,000 Office salaries expense 92,000 Depreciation expense—office equipment 6,000 Miscellaneous expense—selling 5,000 Utilities expense—administrative 3,000 Travel expense—selling 50,000 Office supplies expense 2,500 Miscellaneous administrative expense 1,500 i. Estimated other income and expense for May: Interest revenue $14,560 Interest expense 3,000 j. Estimated tax rate: 25% Required: 1. Prepare a sales budget for May.

The budget director of Jupiter Helmets Inc., 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 May: a. Estimated sales for May: Bicycle helmet 9,500 units at $24 per unit Motorcycle helmet 6,000 units at $180 per unit b. Estimated inventories at May 1: Direct materials: Finished products: Plastic 1,480 lbs. Bicycle helmet 200 units at $15 per unit Foam lining 520 lbs. Motorcycle helmet 100 units at $90 per unit c. Desired inventories at May 31: Direct materials: Finished products: Plastic 2,000 lbs. Bicycle helmet 400 units at $15 per unit Foam lining 800 lbs. Motorcycle helmet 300 units at $100 per unit d. Direct materials used in production: In manufacture of bicycle helmet: Plastic 0.90 lb. per unit of product Foam lining 0.20 lb. per unit of product In manufacture of motorcycle helmet: Plastic 3.50 lbs. per unit of product Foam lining 1.40 lbs. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic $4.40 per lb. Foam lining $0.90 per lb. f. Direct labor requirements: Bicycle helmet: Molding Department 0.30 hr. at $15 per hr. Assembly Department 0.10 hr. at $14 per hr. Motorcycle helmet: Molding Department 0.50 hr. at $15 per hr. Assembly Department 0.40 hr. at $14 per hr. g. Estimated factory overhead costs for May: Indirect factory wages $125,000 Power and light $23,000 Depreciation of plant and equipment 45,000 Insurance and property tax 11,000 h. Estimated operating expenses for May: Sales salaries expense $175,000 Advertising expense 120,000 Office salaries expense 92,000 Depreciation expense—office equipment 6,000 Miscellaneous expense—selling 5,000 Utilities expense—administrative 3,000 Travel expense—selling 50,000 Office supplies expense 2,500 Miscellaneous administrative expense 1,500 i. Estimated other income and expense for May: Interest revenue $14,560 Interest expense 3,000 j. Estimated tax rate: 25% Required: 1. Prepare a sales budget for May.

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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a. Estimated sales for May:

Bicycle helmet	9,500 units at $24 per unit
Motorcycle helmet	6,000 units at $180 per unit

b. Estimated inventories at May 1:

Direct materials:			Finished products:
Plastic	1,480	lbs.	Bicycle helmet	200 units at $15 per unit
Foam lining	520	lbs.	Motorcycle helmet	100 units at $90 per unit

c. Desired inventories at May 31:

Direct materials:			Finished products:
Plastic	2,000	lbs.	Bicycle helmet	400 units at $15 per unit
Foam lining	800	lbs.	Motorcycle helmet	300 units at $100 per unit

d. Direct materials used in production:

In manufacture of bicycle helmet:
Plastic		0.90 lb. per unit of product
Foam lining		0.20 lb. per unit of product
In manufacture of motorcycle helmet:
Plastic		3.50 lbs. per unit of product
Foam lining		1.40 lbs. per unit of product

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

Plastic		$4.40 per lb.
Foam lining		$0.90 per lb.

f. Direct labor requirements:

Bicycle helmet:
Molding Department		0.30 hr. at $15 per hr.
Assembly Department		0.10 hr. at $14 per hr.
Motorcycle helmet:
Molding Department		0.50 hr. at $15 per hr.
Assembly Department		0.40 hr. at $14 per hr.

g. Estimated factory overhead costs for May:

Indirect factory wages		$125,000			Power and light		$23,000
Depreciation of plant and equipment		45,000			Insurance and property tax		11,000

h. Estimated operating expenses for May:

Sales salaries expense		$175,000
Advertising expense		120,000
Office salaries expense		92,000
Depreciation expense—office equipment		6,000
Miscellaneous expense—selling		5,000
Utilities expense—administrative		3,000
Travel expense—selling		50,000
Office supplies expense		2,500
Miscellaneous administrative expense		1,500

i. Estimated other income and expense for May:

Interest revenue		$14,560
Interest expense		3,000

j. Estimated tax rate: 25%

Required:

1. Prepare a sales budget for May.

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