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

9. Estimated other revenue and expense for March:

   Interest revenue	$940
   Interest expense	872

10. Estimated tax rate: 30%

Required:

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

Gold Medal Athletic Co. Sales Budget For the Month Ending March 31
	Unit Sales Volume	Unit Selling Price			Total Sales
Batting helmet	fill in the blank 1	$fill in the blank 2			$fill in the blank 3
Football helmet	fill in the blank 4	fill in the blank 5			fill in the blank 6
Total revenue from sales					$fill in the blank 7

2. Prepare a production budget for March. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Gold Medal Athletic Co. Production Budget For the Month Ending March 31
	Units
	Batting helmet	Football helmet
Desired inventory, March 31Estimated inventory, March 1Expected units to be soldTotal units availableTotal units to be produced	fill in the blank 9	fill in the blank 10
Desired inventory, March 31Estimated inventory, March 1Expected units to be soldTotal units availableTotal units to be produced	fill in the blank 12	fill in the blank 13
Desired inventory, March 31Estimated inventory, March 1Expected units to be soldTotal units availableTotal units to be produced	fill in the blank 15	fill in the blank 16
Desired inventory, March 31Estimated inventory, March 1Expected units to be soldTotal units availableTotal units to be produced	fill in the blank 18	fill in the blank 19
Desired inventory, March 31Estimated inventory, March 1Expected units to be soldTotal units availableTotal units to be produced	fill in the blank 21	fill in the blank 22

3. Prepare a direct materials purchases budget for March. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Gold Medal Athletic Co. Direct Materials Purchases Budget For the Month Ending March 31
		Plastic		Foam Lining		Total
Units required for production:
Batting helmet	fill in the blank 23		fill in the blank 24
Football helmet	fill in the blank 25		fill in the blank 26
Desired units of inventory, March 31	fill in the blank 27		fill in the blank 28
Total units available	fill in the blank 29		fill in the blank 30
Estimated units of inventory, March 1	fill in the blank 31		fill in the blank 32
Total units to be purchased	fill in the blank 33		fill in the blank 34
Unit price	$fill in the blank 35		$fill in the blank 36
Total direct materials to be purchased	$fill in the blank 37		$fill in the blank 38		$fill in the blank 39

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
Advertising expenseIndirect factory wagesOffice salaries expenseOffice supplies expenseSales salaries expense	$fill in the blank 52
Advertising expenseDepreciation of plant and equipmentOffice salaries expenseOffice supplies expenseSales salaries expense	fill in the blank 54
Advertising expenseOffice salaries expenseOffice supplies expensePower and lightSales salaries expense	fill in the blank 56
Advertising expenseInsurance and property taxOffice salaries expenseOffice supplies expenseSales salaries expense	fill in the blank 58
Total factory overhead cost	$fill in the blank 59