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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 1.2 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

Anticipated cost of purchases and beginning and ending inventory of direct materials:

Plastic $6 per lb.
Foam lining $4 per lb.

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.

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%

6. Prepare a cost of goods sold budget for March. Work in process at the beginning of March is estimated to be $15,300, and work in process at the end of March is desired to be $14,800. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Gold Medal Athletic Co. Cost of Goods Sold Budget For the Month Ending March 31
Finished goods inventory, March 1 $
Work in process inventory, March 1 $
Direct materials:
Direct materials inventory, March 1 $
Direct materials purchases
Cost of direct materials available for use $
Direct materials inventory, March 31
Cost of direct materials placed in production $
Direct labor
Factory overhead
Total manufacturing costs
Total work in process during period $
Work in process inventory, March 31
Cost of goods manufactured
Cost of finished goods available for sale $
Finished goods inventory, March 31
Cost of goods sold $

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