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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% 1.  Prepare a sales budget for March. Gold Medal Athletic Co. Sales Budget For the Month Ending March 31   Unit Sales Volume Unit Selling Price Total Sales Batting helmet fill in the blank 1 $fill in the blank 2     $fill in the blank 3     Football helmet fill in the blank 4 fill in the blank 5     fill in the blank 6     Total revenue from sales         $fill in the blank 7       2.  Prepare a production budget for March. Enter all amounts as positive numbers. Gold Medal Athletic Co. Production Budget For the Month Ending March 31   Units   Batting helmet Football helmet Expected units to be sold fill in the blank 8 fill in the blank 9 Plus desired inventory, March 31 fill in the blank 10 fill in the blank 11   Total units required fill in the blank 12 fill in the blank 13 Less estimated inventory, March 1 fill in the blank 14 fill in the blank 15 Total units to be produced fill in the blank 16 fill in the blank 17

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% 1.  Prepare a sales budget for March. Gold Medal Athletic Co. Sales Budget For the Month Ending March 31   Unit Sales Volume Unit Selling Price Total Sales Batting helmet fill in the blank 1 $fill in the blank 2     $fill in the blank 3     Football helmet fill in the blank 4 fill in the blank 5     fill in the blank 6     Total revenue from sales         $fill in the blank 7       2.  Prepare a production budget for March. Enter all amounts as positive numbers. Gold Medal Athletic Co. Production Budget For the Month Ending March 31   Units   Batting helmet Football helmet Expected units to be sold fill in the blank 8 fill in the blank 9 Plus desired inventory, March 31 fill in the blank 10 fill in the blank 11   Total units required fill in the blank 12 fill in the blank 13 Less estimated inventory, March 1 fill in the blank 14 fill in the blank 15 Total units to be produced fill in the blank 16 fill in the blank 17

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:

  1. Estimated sales for March:
    Batting helmet 1,200 units at $40 per unit
    Football helmet 6,500 units at $160 per unit
  2. 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
  3. 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
  4. 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
  5. Anticipated cost of purchases and beginning and ending inventory of direct materials:
    Plastic $6.00 per lb.
    Foam lining $4.00 per lb.
  6. 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.
  7. 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
  8. 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
  9. Estimated other income and expense for March:
    Interest revenue $940
    Interest expense 872
  10. Estimated tax rate: 30%

1.  Prepare a sales budget for March.

Gold Medal Athletic Co.
Sales Budget
For the Month Ending March 31
  Unit Sales
Volume		 Unit Selling
Price		 Total Sales
Batting helmet fill in the blank 1 $fill in the blank 2     $fill in the blank 3    
Football helmet fill in the blank 4 fill in the blank 5     fill in the blank 6    
Total revenue from sales         $fill in the blank 7  

 

 

2.  Prepare a production budget for March. Enter all amounts as positive numbers.

Gold Medal Athletic Co.
Production Budget
For the Month Ending March 31
  Units
  Batting helmet Football helmet
Expected units to be sold fill in the blank 8 fill in the blank 9
Plus desired inventory, March 31 fill in the blank 10 fill in the blank 11
  Total units required fill in the blank 12 fill in the blank 13
Less estimated inventory, March 1 fill in the blank 14 fill in the blank 15
Total units to be produced fill in the blank 16 fill in the blank 17

 

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3.  Prepare a direct materials purchases budget for March.

Gold Medal Athletic Co.
Direct Materials Purchases Budget
For the Month Ending March 31
    Plastic   Foam Lining   Total
Pounds required for production:      
  Batting helmet fill in the blank 18 fill in the blank 19  
  Football helmet fill in the blank 20 fill in the blank 21  
  Plus desired inventory, March 31 fill in the blank 22 fill in the blank 23  
Total pounds required fill in the blank 24 fill in the blank 25  
Less estimated inventory, March 1 fill in the blank 26 fill in the blank 27  
Total pounds to be purchased fill in the blank 28 fill in the blank 29  
Unit price (per pound) $fill in the blank 30 $fill in the blank 31  
Total direct materials to be purchased $fill in the blank 32 $fill in the blank 33 $fill in the blank 34



4.  Prepare a direct labor cost budget for March.

Gold Medal Athletic Co.
Direct Labor Cost Budget
For the Month Ending March 31
    Molding
Department		   Assembly
Department		   Total
Hours required for production:      
  Batting helmet fill in the blank 35 fill in the blank 36  
  Football helmet fill in the blank 37 fill in the blank 38  
     Total hours required fill in the blank 39 fill in the blank 40  
Hourly rate $fill in the blank 41 $fill in the blank 42  
Total direct labor cost $fill in the blank 43 $fill in the blank 44 $fill in the blank 45



5.  Prepare a factory overhead cost budget for March.

Gold Medal Athletic Co.
Factory Overhead Cost Budget
For the Month Ending March 31
Indirect factory wages $fill in the blank 46
Depreciation of plant and equipment fill in the blank 47
Power and light fill in the blank 48
Insurance and property tax fill in the blank 49
Total $fill in the blank 50



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.

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.

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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