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%

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 $ $ Football helmet Total revenue from sales $ 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 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 Football helmet Desired units of inventory, March 31 Total units available Estimated units of inventory, March 1 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. 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 Football helmet Total Hourly rate $ $ Total direct labor cost $ 5. Prepare a factory overhead cost budget for March. Gold Medal Athletic Co. Factory Overhead Cost Budget For the Month Ending March 31 $ Total factory overhead cost $ Gold Medal Athletic Co. Cost of Goods Sold Budget For the Month Ending March 31 $ Direct materials: $ $ Cost of direct materials available for use $ Cost of direct materials placed in production Total manufacturing costs Total work in process during 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. Gold Medal Athletic Co. Selling and Administrative Expenses Budget For the Month Ending March 31 Selling expenses: $ Total selling expenses Administrative expenses: $ Total administrative expenses Total operating expenses $ 8. Prepare a budgeted income statement for March. Gold Medal Athletic Co. Budgeted Income Statement For the Month Ending March 31 $ S Operating expenses: Total operating expenses Operating income $ Other revenue and expense: Income before income tax $ Net income $