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 lb. Foam lining 80 lb. 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 lb. Foam lining 65 lb. 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 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50 lb. per unit of product Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic $6.00 per lb. Foam lining $4.00 per lb. 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. 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 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 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. Enter all amounts as positive numbers. Gold Medal Athletic Co. Cost of Goods Sold Budget For the Month Ending March 31 fill in the blank 52 fill in the blank 54 Direct materials: fill in the blank 56 fill in the blank 58 Cost of direct materials available for use fill in the blank 59 fill in the blank 61 Cost of direct materials placed in production fill in the blank 62 fill in the blank 64 fill in the blank 66 Total manufacturing costs fill in the blank 67 Total work in process during the period fill in the blank 68 fill in the blank 70 Cost of goods manufactured fill in the blank 71 Cost of finished goods available for sale fill in the blank 72 fill in the blank 74 Cost of goods sold $fill in the blank 75 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: Sales salaries expense fill in the blank 76 Advertising expense fill in the blank 77 Telephone expense—selling fill in the blank 78 Travel expense—selling fill in the blank 79 Total selling expenses fill in the blank 80 Administrative expenses: Office salaries expense fill in the blank 81 Depreciation expense—office equipment fill in the blank 82 Telephone expense—administrative fill in the blank 83 Office supplies expense fill in the blank 84 Miscellaneous administrative expense fill in the blank 85 Total administrative expenses fill in the blank 86 Total operating expenses $fill in the blank 87 8. Prepare a budgeted income statement for March. Enter all amounts as positive numbers. Gold Medal Athletic Co. Budgeted Income Statement For the Month Ending March 31 fill in the blank 89 fill in the blank 91 fill in the blank 93 Operating expenses: fill in the blank 95 fill in the blank 97 Total operating expenses fill in the blank 98 Income from operations fill in the blank 99 Other income: fill in the blank 101 Other expenses: fill in the blank 103 fill in the blank 104 Income before income tax fill in the blank 105 fill in the blank 107 Net income $fill in the blank 108
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 lb. Foam lining 80 lb. 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 lb. Foam lining 65 lb. 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 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50 lb. per unit of product Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic $6.00 per lb. Foam lining $4.00 per lb. 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. 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 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 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. Enter all amounts as positive numbers. Gold Medal Athletic Co. Cost of Goods Sold Budget For the Month Ending March 31 fill in the blank 52 fill in the blank 54 Direct materials: fill in the blank 56 fill in the blank 58 Cost of direct materials available for use fill in the blank 59 fill in the blank 61 Cost of direct materials placed in production fill in the blank 62 fill in the blank 64 fill in the blank 66 Total manufacturing costs fill in the blank 67 Total work in process during the period fill in the blank 68 fill in the blank 70 Cost of goods manufactured fill in the blank 71 Cost of finished goods available for sale fill in the blank 72 fill in the blank 74 Cost of goods sold $fill in the blank 75 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: Sales salaries expense fill in the blank 76 Advertising expense fill in the blank 77 Telephone expense—selling fill in the blank 78 Travel expense—selling fill in the blank 79 Total selling expenses fill in the blank 80 Administrative expenses: Office salaries expense fill in the blank 81 Depreciation expense—office equipment fill in the blank 82 Telephone expense—administrative fill in the blank 83 Office supplies expense fill in the blank 84 Miscellaneous administrative expense fill in the blank 85 Total administrative expenses fill in the blank 86 Total operating expenses $fill in the blank 87 8. Prepare a budgeted income statement for March. Enter all amounts as positive numbers. Gold Medal Athletic Co. Budgeted Income Statement For the Month Ending March 31 fill in the blank 89 fill in the blank 91 fill in the blank 93 Operating expenses: fill in the blank 95 fill in the blank 97 Total operating expenses fill in the blank 98 Income from operations fill in the blank 99 Other income: fill in the blank 101 Other expenses: fill in the blank 103 fill in the blank 104 Income before income tax fill in the blank 105 fill in the blank 107 Net income $fill in the blank 108
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
part 3 of previous
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 lb. Foam lining 80 lb. 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 lb. Foam lining 65 lb. 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 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50 lb. per unit of product - Anticipated cost of purchases and beginning and ending inventory of direct materials:
Plastic $6.00 per lb. Foam lining $4.00 per lb. - 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. - Estimated
factory overhead costs for March:Indirect factory wages $86,000 Depreciation of plant and equipment12,000 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 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 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. Enter all amounts as positive numbers.
| Gold Medal Athletic Co. Cost of Goods Sold Budget For the Month Ending March 31 |
|||
|---|---|---|---|
| fill in the blank 52 | |||
| fill in the blank 54 | |||
| Direct materials: | |||
| fill in the blank 56 | |||
| fill in the blank 58 | |||
| Cost of direct materials available for use | fill in the blank 59 | ||
| fill in the blank 61 | |||
| Cost of direct materials placed in production | fill in the blank 62 | ||
| fill in the blank 64 | |||
| fill in the blank 66 | |||
| Total manufacturing costs | fill in the blank 67 | ||
| Total work in process during the period | fill in the blank 68 | ||
| fill in the blank 70 | |||
| Cost of goods manufactured | fill in the blank 71 | ||
| Cost of finished goods available for sale | fill in the blank 72 | ||
| fill in the blank 74 | |||
| Cost of goods sold | $fill in the blank 75 |
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: | |||
| Sales salaries expense | fill in the blank 76 | ||
| Advertising expense | fill in the blank 77 | ||
| Telephone expense—selling | fill in the blank 78 | ||
| Travel expense—selling | fill in the blank 79 | ||
| Total selling expenses | fill in the blank 80 | ||
| Administrative expenses: | |||
| Office salaries expense | fill in the blank 81 | ||
| Depreciation expense—office equipment | fill in the blank 82 | ||
| Telephone expense—administrative | fill in the blank 83 | ||
| Office supplies expense | fill in the blank 84 | ||
| Miscellaneous administrative expense | fill in the blank 85 | ||
| Total administrative expenses | fill in the blank 86 | ||
| Total operating expenses | $fill in the blank 87 |
8. Prepare a budgeted income statement for March. Enter all amounts as positive numbers.
| Gold Medal Athletic Co. Budgeted Income Statement For the Month Ending March 31 |
|||
|---|---|---|---|
| fill in the blank 89 | |||
| fill in the blank 91 | |||
| fill in the blank 93 | |||
| Operating expenses: | |||
| fill in the blank 95 | |||
| fill in the blank 97 | |||
| Total operating expenses | fill in the blank 98 | ||
| Income from operations | fill in the blank 99 | ||
| Other income: | |||
| fill in the blank 101 | |||
| Other expenses: | |||
| fill in the blank 103 | fill in the blank 104 | ||
| Income before income tax | fill in the blank 105 | ||
| fill in the blank 107 | |||
| Net income | $fill in the blank 108 |
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