Budgeted Income Statement and Supporting Budgets 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: a. Estimated sales for May: Bicycle helmet 9,500 units at $24 per unit Motorcycle helmet 6,250 units at $185 per unit b. Estimated inventories at May 1: Direct materials:         Finished products:        Plastic   1,480  lbs.      Bicycle helmet   200 units at $15 per unit    Foam lining   520  lbs.      Motorcycle helmet   100 units at $90 per unit   c. Desired inventories at May 31: Direct materials:         Finished products:        Plastic   2,000  lbs.      Bicycle helmet   400 units at $15 per unit    Foam lining   800  lbs.      Motorcycle helmet   300 units at $100 per unit   d. Direct materials used in production: In manufacture of bicycle helmet:    Plastic   0.90 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   e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic   $4.40 per lb. Foam lining   $0.90 per lb.   f. 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.   g. Estimated factory overhead costs for May: Indirect factory wages   $125,000     Power and light   $23,000 Depreciation of plant and equipment   45,000     Insurance and property tax   11,000   h. Estimated operating expenses for May: Sales salaries expense   $175,000 Advertising expense   120,000 Office salaries expense   92,000 Depreciation expense—office equipment   6,000 Miscellaneous expense—selling   5,000 Utilities expense—administrative   3,000 Travel expense—selling   50,000 Office supplies expense   2,500 Miscellaneous administrative expense   1,500   i. Estimated other income and expense for May: Interest revenue   $14,560 Interest expense   3,000   j. Estimated tax rate: 25% Required: 1.  Prepare a sales budget for May. Jupiter Helmets Inc.Sales BudgetFor the Month Ending May 31   Unit Sales Volume Unit Selling Price Total Sales Bicycle helmet fill in the blank e5e776085f9407a_1 $fill in the blank e5e776085f9407a_2 $fill in the blank e5e776085f9407a_3 Motorcycle helmet fill in the blank e5e776085f9407a_4 fill in the blank e5e776085f9407a_5 fill in the blank e5e776085f9407a_6 Total revenue from sales     $fill in the blank e5e776085f9407a_7     Feedback   2.  Prepare a production budget for May. Jupiter Helmets Inc.Production BudgetFor the Month Ending May 31   Bicycle Helmet Units Motorcycle Helmet Units Expected units to be sold fill in the blank 7bbb60057fa0f94_1 fill in the blank 7bbb60057fa0f94_2   Plus desired inventory, May 31 Plus desired inventory, May 31 Total fill in the blank 7bbb60057fa0f94_6 fill in the blank 7bbb60057fa0f94_7   Less estimated inventory, May 1 Less estimated inventory, May 1 Total units to be produced fill in the blank 7bbb60057fa0f94_11 fill in the blank 7bbb60057fa0f94_12     Feedback   3.  Prepare a direct materials purchases budget for May. Jupiter Helmets Inc.Direct Materials Purchases BudgetFor the Month Ending May 31     Direct Materials     Plastic Foam Lining Total Units required for production:       Bicycle helmet fill in the blank 20b99a029fb4014_1 fill in the blank 20b99a029fb4014_2   Motorcycle helmet fill in the blank 20b99a029fb4014_3 fill in the blank 20b99a029fb4014_4     Plus desired units of inventory, May 31 Plus desired units of inventory, May 31   Total fill in the blank 20b99a029fb4014_8 fill in the blank 20b99a029fb4014_9     Less estimated units of inventory, May 1 Less estimated units of inventory, May 1   Total units to be purchased fill in the blank 20b99a029fb4014_13 fill in the blank 20b99a029fb4014_14   Unit price $fill in the blank 20b99a029fb4014_15 $fill in the blank 20b99a029fb4014_16   Total direct materials to be purchased $fill in the blank 20b99a029fb4014_17 $fill in the blank 20b99a029fb4014_18 $fill in the blank 20b99a029fb4014_19     Feedback   4.  Prepare a direct labor cost budget for May. Jupiter Helmets Inc.Direct Labor Cost BudgetFor the Month Ending May 31   Molding Department Assembly Department Total Hours required for production:       Bicycle helmet fill in the blank bfe82a0c7fd3ffb_1 fill in the blank bfe82a0c7fd3ffb_2   Motorcycle helmet fill in the blank bfe82a0c7fd3ffb_3 fill in the blank bfe82a0c7fd3ffb_4   Total fill in the blank bfe82a0c7fd3ffb_5 fill in the blank bfe82a0c7fd3ffb_6   Hourly rate $fill in the blank bfe82a0c7fd3ffb_7 $fill in the blank bfe82a0c7fd3ffb_8   Total direct labor cost $fill in the blank bfe82a0c7fd3ffb_9 $fill in the blank bfe82a0c7fd3ffb_10 $fill in the blank bfe82a0c7fd3ffb_11

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Budgeted Income Statement and Supporting Budgets

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:

a. Estimated sales for May:

Bicycle helmet 9,500 units at $24 per unit
Motorcycle helmet 6,250 units at $185 per unit

b. Estimated inventories at May 1:

Direct materials:         Finished products:    
   Plastic   1,480  lbs.      Bicycle helmet   200 units at $15 per unit
   Foam lining   520  lbs.      Motorcycle helmet   100 units at $90 per unit

 

c. Desired inventories at May 31:

Direct materials:         Finished products:    
   Plastic   2,000  lbs.      Bicycle helmet   400 units at $15 per unit
   Foam lining   800  lbs.      Motorcycle helmet   300 units at $100 per unit

 

d. Direct materials used in production:

In manufacture of bicycle helmet:
   Plastic   0.90 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

 

e. Anticipated cost of purchases and beginning and ending inventory of direct materials:

Plastic   $4.40 per lb.
Foam lining   $0.90 per lb.

 

f. 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.

 

g. Estimated factory overhead costs for May:

Indirect factory wages   $125,000     Power and light   $23,000
Depreciation of plant and equipment   45,000     Insurance and property tax   11,000

 

h. Estimated operating expenses for May:

Sales salaries expense   $175,000
Advertising expense   120,000
Office salaries expense   92,000
Depreciation expense—office equipment   6,000
Miscellaneous expense—selling   5,000
Utilities expense—administrative   3,000
Travel expense—selling   50,000
Office supplies expense   2,500
Miscellaneous administrative expense   1,500

 

i. Estimated other income and expense for May:

Interest revenue   $14,560
Interest expense   3,000

 

j. Estimated tax rate: 25%

Required:

1.  Prepare a sales budget for May.

Jupiter Helmets Inc.Sales BudgetFor the Month Ending May 31
  Unit Sales Volume Unit Selling Price Total Sales
Bicycle helmet fill in the blank e5e776085f9407a_1 $fill in the blank e5e776085f9407a_2 $fill in the blank e5e776085f9407a_3
Motorcycle helmet fill in the blank e5e776085f9407a_4 fill in the blank e5e776085f9407a_5 fill in the blank e5e776085f9407a_6
Total revenue from sales     $fill in the blank e5e776085f9407a_7
 
 
Feedback
 

2.  Prepare a production budget for May.

Jupiter Helmets Inc.Production BudgetFor the Month Ending May 31
  Bicycle Helmet Units Motorcycle Helmet Units
Expected units to be sold fill in the blank 7bbb60057fa0f94_1 fill in the blank 7bbb60057fa0f94_2
 
Plus desired inventory, May 31 Plus desired inventory, May 31
Total fill in the blank 7bbb60057fa0f94_6 fill in the blank 7bbb60057fa0f94_7
 
Less estimated inventory, May 1 Less estimated inventory, May 1
Total units to be produced fill in the blank 7bbb60057fa0f94_11 fill in the blank 7bbb60057fa0f94_12
 
 
Feedback
 

3.  Prepare a direct materials purchases budget for May.

Jupiter Helmets Inc.Direct Materials Purchases BudgetFor the Month Ending May 31
    Direct Materials  
  Plastic Foam Lining Total
Units required for production:      
Bicycle helmet fill in the blank 20b99a029fb4014_1 fill in the blank 20b99a029fb4014_2  
Motorcycle helmet fill in the blank 20b99a029fb4014_3 fill in the blank 20b99a029fb4014_4  
 
Plus desired units of inventory, May 31 Plus desired units of inventory, May 31  
Total fill in the blank 20b99a029fb4014_8 fill in the blank 20b99a029fb4014_9  
 
Less estimated units of inventory, May 1 Less estimated units of inventory, May 1  
Total units to be purchased fill in the blank 20b99a029fb4014_13 fill in the blank 20b99a029fb4014_14  
Unit price $fill in the blank 20b99a029fb4014_15 $fill in the blank 20b99a029fb4014_16  
Total direct materials to be purchased $fill in the blank 20b99a029fb4014_17 $fill in the blank 20b99a029fb4014_18 $fill in the blank 20b99a029fb4014_19
 
 
Feedback
 

4.  Prepare a direct labor cost budget for May.

Jupiter Helmets Inc.Direct Labor Cost BudgetFor the Month Ending May 31
  Molding Department Assembly Department Total
Hours required for production:      
Bicycle helmet fill in the blank bfe82a0c7fd3ffb_1 fill in the blank bfe82a0c7fd3ffb_2  
Motorcycle helmet fill in the blank bfe82a0c7fd3ffb_3 fill in the blank bfe82a0c7fd3ffb_4  
Total fill in the blank bfe82a0c7fd3ffb_5 fill in the blank bfe82a0c7fd3ffb_6  
Hourly rate $fill in the blank bfe82a0c7fd3ffb_7 $fill in the blank bfe82a0c7fd3ffb_8  
Total direct labor cost $fill in the blank bfe82a0c7fd3ffb_9 $fill in the blank bfe82a0c7fd3ffb_10 $fill in the blank bfe82a0c7fd3ffb_11
8. Prepare a budgeted income statement for May. If required, round your interim calculations to nearest whole value.
Jupiter Helmets Inc.
Budgeted Income Statement
For the Month Ending May 31
Revenue from sales
Cost of goods sold
Gross profit
Selling and administrative expenses:
Selling expenses
Administrative expenses
Total Selling and administrative expenses
Operating income
Other revenue:
Interest revenue
Other expenses:
Interest expense
Income before income tax
Income tax expense
Net income
%24
Transcribed Image Text:8. Prepare a budgeted income statement for May. If required, round your interim calculations to nearest whole value. Jupiter Helmets Inc. Budgeted Income Statement For the Month Ending May 31 Revenue from sales Cost of goods sold Gross profit Selling and administrative expenses: Selling expenses Administrative expenses Total Selling and administrative expenses Operating income Other revenue: Interest revenue Other expenses: Interest expense Income before income tax Income tax expense Net income %24
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 desired to be $3,800.
Jupiter Helmets Inc.
Cost of Goods Sold Budget
For the Month Ending May 31
Finished goods inventory, May 1
Work in process inventory, May 1
Direct materials:
Direct materials inventory, May 1
Direct materials purchases
Cost of direct materials available for use
Less: Direct materials inventory, May 31
Cost of direct materials placed in production
Direct labor
Factory overhead
Total manufacturing costs
Total work in process during period
Less: Work in process inventory, May 31
Cost of goods manufactured
Cost of finished goods available for sale
Less: Finished goods inventory, May 31
Cost of goods sold
Transcribed Image Text: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 desired to be $3,800. Jupiter Helmets Inc. Cost of Goods Sold Budget For the Month Ending May 31 Finished goods inventory, May 1 Work in process inventory, May 1 Direct materials: Direct materials inventory, May 1 Direct materials purchases Cost of direct materials available for use Less: Direct materials inventory, May 31 Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during period Less: Work in process inventory, May 31 Cost of goods manufactured Cost of finished goods available for sale Less: Finished goods inventory, May 31 Cost of goods sold
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