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 2016:

a. Estimated sales for March:

Batting helmet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 units at $40 per unit

Football helmet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6,500 units at $160 per unit

b. Estimated inventories at March 1:

c. Desired inventories at March 31:

d. 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
e. Anticipated cost of purchases and beginning and ending inventory of direct materials:
Plastic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6.00 per lb.
Foam lining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4.00 per lb.
f. 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.
g. Estimated factory overhead costs for March:

h. Estimated operating expenses for March:
Sales salaries expense........................................$184,300
Advertising expense.............................................87,200
Office salaries expense..........................................32,400
Depreciation expense-office equipment......................3,800
Telephone expense-selling......................................5,800
Telephone expense-administrative.............................1,200
Travel expense-selling............................................9,000
Office supplies expense.............................................1,100
Miscellaneous administrative expense..........................1,000
i. Estimated other income and expense for March:
Interest revenue......................................................$940
Interest expense........................................................872
j. Estimated tax rate: 30%
Instructions
1. Prepare a sales budget for March.
2. Prepare a production budget for March.
3. Prepare a direct materials purchases budget for March.
4. Prepare a direct labor cost budget for March.
5. Prepare a factory overhead cost budget for March.
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.
7. Prepare a selling and administrative expenses budget for March.
8. Prepare a budgeted income statement for March.

Transcribed Image Text:

Direct materials: Finished products: 90 lbs. 80 lbs Batting helmet Football helmet.......240 units at $77 per unit Direct materials: Finished products: 50 lbs. 65 lbs Batting helmet.........50 units at $25 per unit tann lisnir.. Indirect factory wages Depreciation of plant and equipment $86,000 12,000 Power and light Insurance and property tax $4,000 2,300