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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: a. Estimated sales for March: Batting helmet 1,200 units at $40 per unit Football helmet 6,500 units at $160 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Plastic 90 lb. Batting helmet 40 units at $25 per unit Foam lining 80 lb. Football helmet 240 units at $77 per unit c. Desired inventories at March 31: Direct materials: Finished products: Plastic 50 lb. Batting helmet 50 units at $25 per unit Foam lining 65 lb. Football helmet 220 its at $78 per unit d. 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 1.50lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic $6.00 per lb. Foam lining $4.00 per lb. f. 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 l.80 hrs.at $14perhr. g. Estimated factory overhead costs for March: Indirect factory wages $86,000 Power and light $4,000 Depreciation of plant and equipment 12,000 Insurance and property tax 2300 h. Estimated operating 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 i. Estimated other income and expense for March: Interest Revenue $940 Interest Expense 872 j. Estimated tax rate: 30% Instructions 1. Prepare a sales budget for March. 2. Prepare a production budget for March. 3. Prepare a direct materials purchases budget for March. 4. Prepare a direct labor cost budget for March. 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. 7. Prepare a selling and administrative expenses budget for March. 8. Prepare a budgeted income statement for March. 9. Prepare a factory overhead cost budget for March. 10. Prepare a cost of goods .sold budget for March. Work in process at the beginning of March is estimated to the 115,300, and work in process at the end of March is desired to be $14,800. 11. Prepare a selling and administrative expenses budget for March. 12. Prepare a budgeted income statement for March.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 22, Problem 22.3BPR
Textbook Problem

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:

  1. a. Estimated sales for March:
Batting helmet  1,200 units at $40 per unit
Football helmet  6,500 units at $160 per unit
  1. b. Estimated inventories at March 1:
Direct materials:   Finished products:  
Plastic 90 lb. Batting helmet 40 units at $25 per unit
Foam lining 80 lb. Football helmet 240 units at $77 per unit
  1. c. Desired inventories at March 31:
Direct materials:   Finished products:  
Plastic 50 lb. Batting helmet 50 units at $25 per unit
Foam lining 65 lb. Football helmet
  1. 220 its at $78 per unit
  2. d. 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. 1.50lb. per unit of product
  2. e.  Anticipated cost of purchases and beginning and ending inventory of direct materials:
Plastic  $6.00 per lb.
Foam lining  $4.00 per lb.
  1. f.  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  l.80 hrs.at $14perhr.
  1. g.  Estimated factory overhead costs for March:
Indirect factory wages $86,000 Power and light $4,000
Depreciation of plant and equipment 12,000 Insurance and property tax 2300
  1. h.  Estimated operating 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
  1. i. Estimated other income and expense for March:
Interest Revenue $940
Interest Expense 872
  1. j. Estimated tax rate: 30%

Instructions

1.    Prepare a sales budget for March.

2.    Prepare a production budget for March.

3. Prepare a direct materials purchases budget for March.

4. Prepare a direct labor cost budget for March.

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.

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

8.    Prepare a budgeted income statement for March.

9.    Prepare a factory overhead cost budget for March.

10.    Prepare a cost of goods .sold budget for March. Work in process at the beginning of March is estimated to the 115,300, and work in process at the end of March is desired to be $14,800.

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

12.    Prepare a budgeted income statement for March.

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Chapter 22 Solutions

Accounting
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