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: Finished products: Plastic 90 lbs. Batting helmet 40 units at $25 per unit Foam lining 80 lbs. Football helmet 240 units at $77 per unit Desired inventories at March 31: Direct materials: Finished products: Plastic 50 lbs. Batting helmet 50 units at $25 per unit Foam lining 65 lbs. 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 Power and light $4,000 Depreciation of plant and equipment 12,000 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 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 Estimated other revenue and expense for March: Interest revenue $940 Interest expense 872 Estimated tax rate: 30% Instructions Prepare a sales budget for March. Prepare a production budget for March. Prepare a direct materials purchases budget for March. Prepare a direct labor cost budget for March. Answer Check Figure: Total direct labor cost in Assembly Dept., $171,766 Prepare a factory overhead cost budget for March. 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. Prepare a selling and administrative expenses budget for March. Prepare a budgeted income statement for March.

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: Finished products: Plastic 90 lbs. Batting helmet 40 units at $25 per unit Foam lining 80 lbs. Football helmet 240 units at $77 per unit Desired inventories at March 31: Direct materials: Finished products: Plastic 50 lbs. Batting helmet 50 units at $25 per unit Foam lining 65 lbs. 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 Power and light $4,000 Depreciation of plant and equipment 12,000 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 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 Estimated other revenue and expense for March: Interest revenue $940 Interest expense 872 Estimated tax rate: 30% Instructions Prepare a sales budget for March. Prepare a production budget for March. Prepare a direct materials purchases budget for March. Prepare a direct labor cost budget for March. Answer Check Figure: Total direct labor cost in Assembly Dept., $171,766 Prepare a factory overhead cost budget for March. 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. Prepare a selling and administrative expenses budget for March. Prepare a budgeted income statement for March.

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter22: Budgeting

Section: Chapter Questions

Problem 3PB: Budgeted income statement and supporting budgets The budget director of Gold Medal Athletic Co.,...

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Question

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: Finished products:

Plastic 90 lbs. Batting helmet 40 units at $25 per unit

Foam lining 80 lbs. Football helmet 240 units at $77 per unit
Desired inventories at March 31:

Direct materials: Finished products:

Plastic 50 lbs. Batting helmet 50 units at $25 per unit

Foam lining 65 lbs. 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 Power and light $4,000

Depreciation of plant and equipment 12,000 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 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

Estimated other revenue and expense for March:

Interest revenue $940

Interest expense 872
Estimated tax rate: 30%

Instructions

Prepare a sales budget for March.
Prepare a production budget for March.
Prepare a direct materials purchases budget for March.
Prepare a direct labor cost budget for March.

Answer
Check Figure: Total direct labor cost in Assembly Dept., $171,766
Prepare a factory overhead cost budget for March.
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.
Prepare a selling and administrative expenses budget for March.
Prepare a budgeted income statement for March.

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Batting helmet	1,200 units at $40 per unit
Football helmet	6,500 units at $160 per unit

Direct materials:			Finished products:
Plastic	90	lbs.	Batting helmet	40	units at $25 per unit
Foam lining	80	lbs.	Football helmet	240	units at $77 per unit

Indirect factory wages	$86,000		Power and light	$4,000
Depreciation of plant and equipment	12,000		Insurance and property tax	2,300