Budgeted Income Statement and Supporting Budgets The budget director of Gold Med
ID: 2439006 • Letter: B
Question
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:
Estimated inventories at March 1:
Desired inventories at March 31:
Direct materials used in production:
Anticipated cost of purchases and beginning and ending inventory of direct materials:
Direct labor requirements:
Estimated factory overhead costs for March:
Estimated operating expenses for March:
Estimated other income and expense for March:
Estimated tax rate: 30%
Required:
1. Prepare a sales budget for March. Enter all amounts as positive numbers.
2. Prepare a production budget for March. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
3. Prepare a direct materials purchases budget for March. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
4. Prepare a direct labor cost budget for March. Enter all amounts as positive numbers.
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. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
7. Prepare a selling and administrative expenses budget for March.
8. Prepare a budgeted income statement for March.
Batting helmet 1,200 units at $40 per unit Football helmet 6,500 units at $160 per unitExplanation / Answer
Answers
Gold Medal Athletic Co.
Sales Budget
For the Month Ending March 31
Unit Sales
Unit Selling
Total Sales
Volume
Price
Batting helmet
1200
$
40
$
48000
Football helmet
6500
$
160
$
1040000
Total revenue from sales
$
1088000
Gold Medal Athletic Co.
Production Budget
For the Month Ending March 31
Units
Batting helmet
Football helmet
Expected units to be sold
1200
6500
Desired inventory, March 31
50
220
Total units available
1250
6720
Estimated inventory, March 1
40
240
Total units to be produced
1210
6480
----Direct material purchase Budget (#3)
Plastic
Foam Lining
Total
Units required for production:
Batting helmet
1452
605
2057
Football helmet
22680
9720
32400
Desired units of inventory, March 31
50
65
115
Total units available
24182
10390
34572
Estimated units of inventory, March 1
90
80
170
Total units to be purchased
24092
10310
34402
Unit price
$ 6.00
$ 4.00
Total direct materials to be purchased
$ 144,552.00
$ 41,240.00
$ 185,792.00
Direct Labor Cost Budget
For the Month Ending March 31
Molding
Assembly
Total
Hours required for production:
Batting helmet
242
605
847
Football helmet
3240
11664
14904
Total
3482
12269
15751
Hourly rate
$ 20.00
$ 14.00
Total direct labor cost
$ 69,640.00
$ 171,766.00
$ 241,406.00
Gold Medal Athletic Co.
Sales Budget
For the Month Ending March 31
Unit Sales
Unit Selling
Total Sales
Volume
Price
Batting helmet
1200
$
40
$
48000
Football helmet
6500
$
160
$
1040000
Total revenue from sales
$
1088000
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