Budgeted Income Statement and Supporting Budgets

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	9,250 units at $24 per unit
Motorcycle helmet	5,000 units at $175 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 expenseoffice equipment		6,000
Miscellaneous expenseselling		5,000
Utilities expenseadministrative		3,000
Travel expenseselling		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%

Prepare a factory overhead cost budget for May.

Jupiter Helmets Inc.
Factory Overhead Cost Budget
For the Month Ending May 31
Indirect factory wages	$fill in the blank c14110fa1ff506a_1
Depreciation of plant and equipment	fill in the blank c14110fa1ff506a_2
Power and light	fill in the blank c14110fa1ff506a_3
Insurance and property tax	fill in the blank c14110fa1ff506a_4
Total	$fill in the blank c14110fa1ff506a_5

6. Prepare a cost of goods sold budget for May. Work in process at the beginning of May is estimated to be $4,200, and work in process at the end of May is desired to be $3,800.

Jupiter Helmets Inc.
Cost of Goods Sold Budget
For the Month Ending May 31
Finished goods inventory, May 1			$fill in the blank f51782fef04ffd2_2
Work in process inventory, May 1		$fill in the blank f51782fef04ffd2_4
Direct materials:
Direct materials inventory, May 1	$fill in the blank f51782fef04ffd2_6
Direct materials purchases	fill in the blank f51782fef04ffd2_7
Cost of direct materials available for use	$fill in the blank f51782fef04ffd2_8
Less: Direct materials inventory, May 31	fill in the blank f51782fef04ffd2_9
Cost of direct materials placed in production	$fill in the blank f51782fef04ffd2_11
Direct labor	fill in the blank f51782fef04ffd2_12
Factory overhead	fill in the blank f51782fef04ffd2_13
Total manufacturing costs		fill in the blank f51782fef04ffd2_14
Total work in process during period		$fill in the blank f51782fef04ffd2_15
Less: Work in process inventory, May 31		fill in the blank f51782fef04ffd2_17
Cost of goods manufactured			fill in the blank f51782fef04ffd2_19
Cost of finished goods available for sale			$fill in the blank f51782fef04ffd2_20
Less: Finished goods inventory, May 31			fill in the blank f51782fef04ffd2_22
Cost of goods sold			$fill in the blank f51782fef04ffd2_24

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

Jupiter Helmets Inc.
Selling and Administrative Expenses Budget
For the Month Ending May 31
Selling expenses:
Sales salaries expense	$fill in the blank aa43e507f065ff8_2
Advertising expense	fill in the blank aa43e507f065ff8_4
Travel expense-selling	fill in the blank aa43e507f065ff8_6
Miscellaneous-selling	fill in the blank aa43e507f065ff8_8
Total selling expenses		$fill in the blank aa43e507f065ff8_9
Administrative expenses:
Office salaries expense	$fill in the blank aa43e507f065ff8_11
Depreciation expense-office equipment	fill in the blank aa43e507f065ff8_13
Utilities expense-administrative	fill in the blank aa43e507f065ff8_15
Office supplies expense	fill in the blank aa43e507f065ff8_17
Miscellaneous administrative expense	fill in the blank aa43e507f065ff8_19
Total administrative expenses		fill in the blank aa43e507f065ff8_20
Total selling and administrative expenses		$fill in the blank aa43e507f065ff8_21

8. Prepare a budgeted income statement for May. If required, round your interim calculations to nearest whole value.

Jupiter Helmets Inc.
Budgeted Income Statement
For the Month Ending May 31
Revenue from sales		$fill in the blank 863df603d054029_1
Cost of goods sold		fill in the blank 863df603d054029_2
Gross profit		$fill in the blank 863df603d054029_3
Selling and administrative expenses:
Selling expenses	$fill in the blank 863df603d054029_4
Administrative expenses	fill in the blank 863df603d054029_5
Total Selling and administrative expenses		fill in the blank 863df603d054029_6
Operating income		$fill in the blank 863df603d054029_7
Other revenue:
Interest revenue	$fill in the blank 863df603d054029_8
Other expenses:
Interest expense	fill in the blank 863df603d054029_9	fill in the blank 863df603d054029_10
Income before income tax		$fill in the blank 863df603d054029_11
Income tax expense		fill in the blank 863df603d054029_12
Net income		$fill in the blank 863df603d054029_13