Question
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
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:
- Estimated sales for March:
Batting helmet 1,200 units at $40 per unit Football helmet 6,500 units at $160 per unit - Estimated inventories at March 1:
Direct materials: Plastic 90 lb. Foam lining 80 lb. Finished products: Batting helmet 40 units at $25 per unit Football helmet 240 units at $77 per unit - Desired inventories at March 31:
Direct materials: Plastic 50 lb. Foam lining 65 lb. Finished products: Batting helmet 50 units at $25 per unit Football helmet 220 units at $78 per unit - Direct materials used in production:
In manufacture of batting helmet: Plastic 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50 lb. per unit of product - Anticipated cost of purchases and beginning and ending inventory of direct materials:
Plastic $6.00 per lb. Foam lining $4.00 per lb. - Direct labor requirements:
Batting helmet: Molding Department 0.20 hr. at $20 per hr. Assembly Department 0.50 hr. at $14 per hr. Football helmet: Molding Department 0.50 hr. at $20 per hr. Assembly Department 1.80 hrs. at $14 per hr. - 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 - 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 - Estimated other income and expense for March:
Interest revenue $940 Interest expense 872 - Estimated tax rate: 30%
Required:
1. Prepare a sales budget for March.
| 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. Enter all amounts as positive numbers.
| Gold Medal Athletic Co. Production Budget For the Month Ending March 31 | ||
|---|---|---|
| Units | ||
| Batting helmet | Football helmet | |
| Expected units to be sold | ||
| Plus desired inventory, March 31 | ||
| Total units required | ||
| Less estimated inventory, March 1 | ||
| Total units to be produced | ||
3. Prepare a direct materials purchases budget for March. Enter all amounts as positive numbers.
| 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 | ||||||
| Plus desired units of inventory, March 31 | ||||||
| Total units required | ||||||
| Less estimated units of inventory, March 1 | ||||||
| Total units to be purchased | ||||||
| Unit price | ||||||
| Total direct materials to be purchased | ||||||
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Mathematical Applications for the Management Life and Social Sciences
Authors: Ronald J. Harshbarger, James J. Reynolds
11th edition
978-1305108042
