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 2014:

1. Estimated sales for March:
2. Estimated inventories at March 1:
3. Desired inventories at March 31:
4. Direct materials used in production:
5. Anticipated cost of purchases and beginning and ending inventory of direct materials:
6. Direct labor requirements:
7. Estimated factory overhead costs for March:
8. Estimated operating expenses for March:
9. Estimated other income and expense for March:
10. Estimated tax rate: 30%

Required:

1. Prepare a sales budget for March. Enter all amounts as positive numbers.

Batting helmet		$			$
Football helmet
Total revenue from sales					$

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

Expected units to be sold
Plus desired inventory, March 31, 2014
Total
Less estimated inventory, March 1, 2014
Total units to be produced

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

Units required for production:
Batting helmet
Football helmet
Plus desired units of inventory, March 31, 2014
Total
Less estimated units of inventory, March 1, 2014
Total units to be purchased
Unit price	$	$
Total direct materials to be purchased	$	$	$

4. Prepare a direct labor cost budget for March. Enter all amounts as positive numbers.

Hours required for production:
Batting helmet
Football helmet
Total
Hourly rate	$	$
Total direct labor cost	$	$	$

5. Prepare a factory overhead cost budget for March. Enter all amounts as positive numbers.

Indirect factory wages	$
Depreciation of plant and equipment
Power and light
Insurance and property tax
Total	$

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.

Direct materials:

Cost of direct materials available for use

Cost of direct materials placed in production

Total manufacturing costs
Total work in process during the period

Cost of goods manufactured
Cost of finished goods available for sale

Cost of goods sold

7. Prepare a selling and administrative expenses budget for March. Enter all amounts as positive numbers.

Selling expenses:
Sales salaries expense
Advertising expense
Telephone expenseselling
Travel expenseselling
Total selling expenses
Administrative expenses:
Office salaries expense
Depreciation expenseoffice equipment
Telephone expenseadministrative
Office supplies expense
Miscellaneous administrative expense
Total administrative expenses
Total operating expenses

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

Operating expenses:

Total operating expenses
Income from operations
Other income:

Other expenses:

Income before income tax

Net income