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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 lbs.
Foam lining 80 lbs.
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 lbs.
Foam lining 65 lbs.
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 lbs. per unit of product
Foam lining 0.50 lb. per unit of product
In manufacture of football helmet:
Plastic 3.50 lbs. per unit of product
Foam lining 1.50 lbs. 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%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:
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.

Gold Medal Athletic Co. Budgeted Income Statement For the Month Ending March 31
Operating expenses:
Total operating expenses
Income from operations
Other income:
Other expenses:
Income before income tax
Net income $

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