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 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 Estimated tax rate: 30%

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 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 Estimated tax rate: 30%

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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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:

  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

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

Estimated tax rate: 30%

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

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

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

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