• #1. How is this budget going to be used in a real company? Be concise.
• #2. Evaluate this event that occurred at the beginning of March (your study problem budgeting period). Calculate and discuss the actual direct labor (rate & hour) variancesby comparing this 'actual' event' with the 'planned' budget, make any assumption if you must (but list out your assumption).
  • the assembler (in the assembly department) wages are adjusted to meet new California minimum wage of $15/hour.
  • There is a high turnover and everyone in the assembly department are new, therefore the actual takes 10% longer time to complete than budgeted.
  • The budgeted molding department is fairly accurate so you do not need to change.
• #3. Real-world application. The budget concept can be incorporated in real life, obviously, and you had done so when you saved for a new PlayStation or your new car. Why is it then not everyone achieve their financial goal...or even becoming a millionaire even though these individuals understand the concept of budget? You have an option to do ONE of the following:
  • I ask that 1 of your responses be about this real-world application.

Gold Medal Athletic Co. Sales Budget For the Month Ending March 31 Unit Sales Unit Selling Total Product Volume Price Sales 95 Batting helmet 1.200 $40.00 48000 Football helmet 6.500 $160.00 1.040.000 L Total revenue from sales Gold Medal Athletic Co. Production Budget For the Month Ending March 31 Expected units to be sold Desired inventory, March 31 Total units available Estimated inventory, March 1 Total units to be produced Units Batting Football Helmet Helmet 1.200 6.500 50 220 1.250 6.?20 [40] [240} 1.210 6.400 3. Gold Medal Athletic Co. Direct Materials Purchases Budget For the Month Ending March 31 Plastic Foam Lining (lbs.) (Ibs.) Total Required units for production: Batting helmet 1,452 605 Football helmet 22,680 9,720 Desired inventory, March 31 50 65 Total units available 24,182 10,390 Estimated inventory, March 1 (90) (80 Total units to be purchased 24,092 10,310 Unit price $6.00 $4.00 S $ $ Total direct materials to be purchased 144,552 41,240 185,792Gold Medal Athletic Co. Direct Labor Cost Budget For the Month Ending March 31 Molding Assembly Department Department Total Hours required for production: Batting helmet 242 605 Football helmet 3,240 11,664 Total 3,482 12.269 Hourly rate $20.00 $14.00 $ S Total direct labor cost 69,640 171,766 241,4065. Gold Medal Athletic Co. Factory Overhead Cost Budget For the Month Ending March 31 Indirect factory wages 86.000 Depreciation of plant and equipment 12,000 1 Power and light 4,000 Insurance and property tax 2,300 S Total 104,3006. Gold Medal Athletic Co. Cost of Goods Sold Budget For the Month Ending March 31 S Finished goods inventory, March 1 19,480 Work in process, March 1 Direct materials: S Direct materials inventory, March 1 860 Direct materials purchases 185,792 Cost of direct materials available for use 186,652 Direct materials inventory, March 31 (560) S Cost of direct materials placed in production 186,092 Direct labor 241,406 Factory overhead 104,300 Total manufacturing costs 531,798 Total work in process during period 547,098 Work in process, March 31 (14,800) Cost of goods manufactured 532,298 S Cost of finished goods available for sale 551,778 Finished goods inventory, March 31 (18.410) S Cost of goods sold 533.368Gold Medal Athletic Co. Selling and Administrative Expenses Budget For the Month Ending March 31 Selling expenses: S Sales salaries expense 184,300 Advertising expense 87,200 Travel expense - selling 9,000 Telephone expense - selling 5.800 S Total selling expenses 286,300 Administrative expenses: S Office salaries expense 32,400 Depr expense - office equip. 3,800 Telephone expense - administrative 1,200 Office supplies expense 1,100 Miscellaneous admin. expense 1,000 Total administrative expenses 39,500 Total operating expenses 325,800Gold Medal Athletic Co. Budgeted Income Statement For the Month Ending March 31 Revenue from sales 1 088 000 Cost of goods sold (533.368) Gross profit 554,632 Operating expenses: S Selling expenses 286,300 Administrative expenses 39,500 Total operating expenses (325.800) S Operating income 228,832 Other revenue and expense: S Interest revenue 940 Interest expense (872) 68 Income before income tax 228,900 Income tax expense (68.670) Net income 160,230