The budget director of Jupiter Helmets Inc., 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 May: Estimated sales for May Bicycle helmet 9,000 units at $40 per unit Motorcycle helmet 6,000 units at $200 per unit Estimated inventories at May 1: Direct materials: Finished products: Plastic1,480lbs. Bicycle helmet.200 units at $15 per unit Foam lining.520 lbs Motorcycle helmet.100 units at $90 per unit Desired inventories at May 31: Direct materials: Finished products: Plastic2,000lbs. Bicycle helmet.400 units at $15 per unit Foam lining.800 lbs Motorcycle helmet.300 units at $100 per unit Direct materials used in productions: In manufacture of bicycle helmet: Plastic0.90 lb. per unit of product Foam lining.0.20 lb. per unit of product In manufacture of motorcycle helmet Plastic..3.50 lbs. per unit of product Foam lining.1.40 lbs. per unit of product Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic $4.40 per lb. Foam Lining $0.90 per lb. Direct labor requirements: Bicycle helmet: Molding Department 0.30 hr. at $15 per hr. Assembly Department 0.10 hr. at $14 per hr. Motorcycle helmet: Molding Department 0.50 hr. at $15 per hr. Assembly Department 0.40 hr. at $14 per hr. Estimated factory overhead costs for May: Indirect factory wages $125,000 Power and light $23,000 Depreciation of plant & equipment $45,000 Insurance & property tax $11,000 Estimated operating expenses for May: Sales salaries expense $175,000 Advertising expense $120,000 Office salaries expense $92,000 Depreciation expenseoffice equipment $6,000 Miscellaneous expenseselling $5,000 Utilities expense---administrative $3,000 Travel expense---selling $50,000 Office supplies $2,500 Miscellaneous administrative expense $1,500 Estimated other income and expense for May: Interest revenue $14,560 Interest expense $3,000 Estimated tax rate: 25% Instructions:

. 5. Prepare a factory overhead cost budget for May.

6. Prepare a cost of goods sold budget for May. Work in process at the beginning of May is estimated to be $4,200, and work in process at the end of May is estimated to be $3,800.

7. Prepare a selling and administrative expenses budget for May.

8. Prepare a budgeted income statement for May.

Q1-4 answers

1) Sales Budget

Sales Budget for May
	Units	@	Total Sales
Estimated Sales Units
Bicycle Helmet	9,000	$40	$360,000
Motorcycle helmet	6,000	$200	$1,200,000
Total			$1,560,000

2) Production budget for May

Production Budget for May
	Bicycle Helmet	Motorcycle Helmet
Estimated Sales Units	9,000	6,000
Plus: Desired Ending Inventory of Finished Product	400	300
Total Units Available for Sale	9,400	6,300
Less: Beginning Inventor of Finished Product	200	100
Budgeted Production Units	9,200	6,200

3) Direct materials purchases budget for May

Direct Material Purchase Budget for May
	Plastic	Foam Lining
Budgeted Production Units Bicycle Helmet	9,200	9,200
Per Unit Raw material required (in lbs)	0.90	0.20
Total Raw material required for production (A)	8,280	1,840
Budgeted Production Units Motorcycle Helment	6,200	6,200
Per Unit Raw material required (in lbs)	3.50	1.40
Total Raw material required for production (B)	21,700	8,680
TOTAL BUDGETED RAW MATERIAL REQUIRED FOR PRODUCTION Budget (A + B)	29,980	10,520
Plus: Desired Ending Inventory of Raw material	2,000	800
Total Needs	31,980	11,320
Less: Beginning Inventor of Raw material	1,480	520
Budgeted Production Units	30,500	10,800
Cost per unit	$4.40	$0.90
Total Budgeted Direct material purchase budget	$134,200	$9,720

TOTAL $143,920

4) Direct labor cost budget for May

	Assembly Department	Molding Department
Budgeted Production Units Bicycle Helmet	9,200	9,200
Direct Labor Hour Required per unit	0.30	0.10
Total Direct labor hours needed for Bicycle Helmet production (A)	2,760	920
Budgeted Production Units Motorcycle Helmet	6,200	6,200
Direct Labor Hour Required per unit	0.50	0.40
Total Direct labor hours needed for Bicycle Helmet production (B)	3,100	2,480
TOTAL DIRECT LABOR HOURS REUQIRED (A + B)	5,860	3,400
Direct Labor Hour Rate	$15	$14
Total Budgeted Direct Labor Cost	$87,900	$47,600