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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

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%

Required:

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 $

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
$
$
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
$
$
Operating expenses:
$
Total operating expenses
Operating income $
Other revenue and expense:
$
Income before income tax $
Net income $

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