The budget director of Gold Medal Co., with 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 units 2. 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 3. 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 4. 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 5. Anticipated cost of purchases and beginning and ending inventory of direct materials: Platic $6 per lb Foam lining $4 per lb 6. 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 7. Estimated factory overhead costs for March: Indirect factory wages $86,000 Power and light $4,000 Depreciation of plant Insurance and and equipment 12,000 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 revenueand expense for March: Interest revenue $940 Interest expense 872 10. Estimated tax rate: 30% Instructions: 1. Prepare a sales budget for March. 2. Prepare a production budget for March. 3. Prepare a direct material purchases budget for March. 4. Prepare a direct labor cost budget for March. 5. Prepare a factory overhead cost budget for March. 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. 7. Prepare a selling and administrative expenses bufget for March. 8. Prepare a budgeted income statement for March.
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.
The budget director of Gold Medal Co., with assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the
1. Estimated sales for March:
Batting helmet 1,200 units at $40 per unit
Football helmet 6,500 units at $160 per units
2. 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
3. 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
4. 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
5. Anticipated cost of purchases and beginning and ending inventory of direct materials:
Platic $6 per lb
Foam lining $4 per lb
6. 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
7. Estimated factory
Indirect factory wages $86,000 Power and light $4,000
and equipment 12,000 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 revenueand expense for March:
Interest revenue $940
Interest expense 872
10. Estimated tax rate: 30%
Instructions:
1. Prepare a sales budget for March.
2. Prepare a production budget for March.
3. Prepare a direct material purchases budget for March.
4. Prepare a direct labor cost budget for March.
5. Prepare a
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.
7. Prepare a selling and administrative expenses bufget for March.
8. Prepare a budgeted income statement for March.
*RESPOND REMAINING SUBPARTS 6 - 7 - 8
Also, identify and explain each of the major components of the operating budget. And, explain the interrelationships among various components of the operating budget.
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Gold Medal Athletic Co.
Cost of Goods Sold Budget
76
77
78
For the Month Ending March 31
79
$ 19,480"
80
Finished goods inventory, March 1
81
Work in process, March 1
15,300
82
Direct materials:
83
Direct materials inventory, March 1
$
860
185,792
Direct materials purchases
Cost of direct materials available for use
84
186,652
(560)
186,092
241,406
104, 300
85
$
86
Direct materials inventory, March 1
87
$
Cost of direct materials placed in production
Direct labor
88
89
Factory overhead
Total manufacturing costs
Totalwork in process during period
Work in process, March 31
Cost of goods manufactured
Cost of finished goods available for sale
Finished goods inventory, March 31
Cost of goods sold
90
531,798
91
92
14,800"
93
94
$ 551,778
95
96
97
98
Supporting calculations:
99
Units
Cost
Total
100
Finished goods inventory, March 1:
101
Batting helmet
Football helmet
Total
102
103
104
104
105
106
Finished goods inventory, March 31:
Batting helmet
Football helmet
Total
107
108
Direct materials inventory, March1
Plastic
109
Foam lining
Total
110
110
111
112
Direct materials inventory, March 31
113
114
115
Plastic
Foam lining
Total
116
117
118 7.
119
Gold Medal Athletic Co.
120
Selling and Administrative Expenses Budget
120
121
For the Month Ending March 31
122
123
Selling expenses:
125
124
125
126
127
128
286,300
129
130
Total selling expenses
Administrative expenses:
131
132
133
134
Total administrative expenses
135
136
Totaloperating expenses
137
138
1398.
120
140
141
Gold Medal Athletic Co.
Budgeted Income Statement
For the Month Ending March 31
142
143
144
145
146
147
148
Revenue from sales
Cost of goods sold
Gross profit
Operating expenses:
Selling expenses
Administrative expenses
149
Total operating expenses
Operating income
Other revenue and expense:
150
151
152
153
Interest revenue
154
Interest expense
155
Income before income tax
228, 900
156
Income tax expense
Net income
157
158
159
Tab 2- Assignment Data
Tab 2- Excel Templates
Tab](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb1e506e3-1f73-4cc0-a056-d42821428dce%2Fde5e938c-391f-4f56-922f-e080efeec513%2Fn5gvp7_processed.png&w=3840&q=75)
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1 Instructions
2 Required: Using the information provided in tab 2- assignment data complete the below budgets.
Enter information in all cells highlighted in green. (Missing data includes numbers or headings)
4
Some of the information (highlighted in gray) has been made available to provide guidance.
6.
1.
Gold Medal Athletic Co.
Sales Budget
For the Month Ending March 31
Unit Sales
7
8.
9.
10
11
Unit Selling
Price
Total
Sales
Product
Volume
12
1,200
6,500
$40.00
Batting helmet
Football helmet
Totalrevenue from sales
48,000
1,040,000
1,088,000
13
14
$160.00
15
16
17
18 FZ.
Gold Medal Athletic Co.
Production Budget
For the Month Ending March 31
19
20
21
Units
22
23
24
Batting
Helmet
Football
Helmet
6,500
25
Expected units to be sold
1,200
26
50
220
Desired inventory, March 31
Totalunits available
Estimated inventory, March 31
Totalunits to be produced
1,250
6,720
27
28
40
240
29
1,210
6,480
30
31
32 3.
33
Gold Medal Athletic Co.
Direct Materials Purchases Budget
For the Month Ending March 31
34
35
Plastic
Foam Lining
(Ibs.)
36
37
(Ibs.)
Total
38
Required units for production:
1,452
22,680
50
24, 182
90
24,092
$6.00
144, 552
39
Batting helmet
605
40
Football helmet
9,720
41
Desired inventory, March 31
65
10,390
80"
10,310
42
Total units available
43
Estimated inventory, March 31
44
Totalunits to be purchased
$4.00
41,240
45
Unit price
Totaldirect materials to be purchased
$ 185,792
46
2$
2$
47
48
49 4.
50
Gold Medal Athletic Co.
51
Direct Labor Cost Budget
52
For the Month Ending March 31
Molding
Department
Assembly
Department
53
54
Total
55
Hours required for production:
56
242
605
Batting helmet
Football helmet
3,240
3,482
$20.00
69,640
11,664
12,269
$14.00
171,766
57
58
Total
Hourly rate
Total direct labor cost
59
2$
2$
$ 241,406
60
61
62
63 5.
64
Gold Medal Athletic Co.
65
Factory Overhead Cost Budget
66
For the Month Ending March 31
67
Indirect factory wages
86,000
12.000
68
69
Depreciation of plant and equipment
Power and light
Insurance and property tax
Total
4,000
2,300
104, 300
70
71
72
2$
73
74
75 "6.
76
Gold Medal Athletic Co.
77
Cost of Goods Sold Budget
78
For the Month Ending March 31
79
80
Finished goods inventory, March 1
$ 19,480
81
Work in process, March 1
2$
15,300
82
Direct materials:
83
Direct materials inventory, March 1
860
185, 792
186 652
84
Direct materials purchases
Coct of direct materiak availa hle for use
85
Tab 2- Assignment Data
Tab 2- Excel Templates
Tab](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb1e506e3-1f73-4cc0-a056-d42821428dce%2Fde5e938c-391f-4f56-922f-e080efeec513%2Fxnwepsa_processed.png&w=3840&q=75)
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