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 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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