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. Estimated sales for March:

Batting helmet	1,200 units at $40 per unit
Football helmet	6,500 units at $160 per unit

2. Estimated inventories at March 1:

Direct materials:
Plastic	90 lbs.
Foam lining	80 lbs.
Finished products:
Batting helmet	40 units at $25 per unit
Football helmet	240 units at $77 per unit

3. Desired inventories at March 31:

Direct materials:
Plastic	50 lbs.
Foam lining	65 lbs.
Finished products:
Batting helmet	50 units at $25 per unit
Football helmet	220 units at $78 per unit

4. Direct materials used in production:

In manufacture of batting helmet:
Plastic	1.2 lbs. per unit of product
Foam lining	0.5 lb. per unit of product
In manufacture of football helmet:
Plastic	3.5 lbs. per unit of product
Foam lining	1.5 lbs. per unit of product

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

Plastic	$6 per lb.
Foam lining	$4 per lb.

6. Direct labor requirements:

Batting helmet:
Molding Department	0.2 hr. at $20 per hr.
Assembly Department	0.5 hr. at $14 per hr.
Football helmet:
Molding Department	0.5 hr. at $20 per hr.
Assembly Department	1.8 hrs. at $14 per hr.

7. Estimated factory overhead costs for March:

Indirect factory wages	$86,000
Depreciation of plant and equipment	12,000
Power and light	4,000
Insurance and property tax	2,300

8. Estimated operating expenses for March:

Sales salaries expense	$184,300
Advertising expense	87,200
Office salaries expense	32,400
Depreciation expenseoffice equipment	3,800
Telephone expenseselling	5,800
Telephone expenseadministrative	1,200
Travel expenseselling	9,000
Office supplies expense	1,100
Miscellaneous administrative expense	1,000

1. Estimated other revenue and expense for March:

Interest revenue	$940
Interest expense	872

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

Gold Medal Athletic Co. Direct Labor Cost Budget For the Month Ending March 31
		Molding Department		Assembly Department		Total
Hours required for production:
Batting helmet	fill in the blank 40		fill in the blank 41
Football helmet	fill in the blank 42		fill in the blank 43
Total	fill in the blank 44		fill in the blank 45
Hourly rate	$fill in the blank 46		$fill in the blank 47
Total direct labor cost	$fill in the blank 48		$fill in the blank 49		$fill in the blank 50

5. Prepare a factory overhead cost budget for March.

Gold Medal Athletic Co. Factory Overhead Cost Budget For the Month Ending March 31
	$fill in the blank 52
	fill in the blank 54
	fill in the blank 56
	fill in the blank 58
Total factory overhead cost	$fill in the blank 59

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. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Gold Medal Athletic Co. Cost of Goods Sold Budget For the Month Ending March 31
			$fill in the blank 61
		$fill in the blank 63
Direct materials:
	$fill in the blank 65
	fill in the blank 67
Cost of direct materials available for use	$fill in the blank 68
	fill in the blank 70
Cost of direct materials placed in production	$fill in the blank 71
	fill in the blank 73
	fill in the blank 75
Total manufacturing costs		fill in the blank 76
Total work in process during period		$fill in the blank 77
		fill in the blank 79
Cost of goods manufactured			fill in the blank 80
Cost of finished goods available for sale			$fill in the blank 81
			fill in the blank 83
Cost of goods sold			$fill in the blank 84