Budgeted Income Statement and Supporting Budgets The budget director of Gold Med
ID: 2476961 • 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 2016:
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. Enter all amounts as positive numbers.
3. Prepare a direct materials purchases budget for March. Enter all amounts as positive numbers.
4. Prepare a direct labor cost budget for March. Enter all amounts as positive numbers.
5. Prepare a factory overhead cost budget for March. Enter all amounts as positive numbers.
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. Enter all amounts as positive numbers.
7. Prepare a selling and administrative expenses budget for March. Enter all amounts as positive numbers.
8. Prepare a budgeted income statement for March. Enter all amounts as positive numbers.
Batting helmet 1,200 units at $40 per unit Football helmet 6,500 units at $160 per unitExplanation / Answer
Solution:
1. Sales budget for March
Gold Medal Athletic Co.
Sales Budget
For the Month Ending March 31, 2016
Unit Sales Volume
Unit Selling Price
Total Sales
Batting helmet
1,200
$40
$48,000
Football helmet
6,500
$160
$1,040,000
Total revenue from sales
$1,088,000
2. Production budget for March.
Gold Medal Athletic Co.
Production Budget
For the Month Ending March 31, 2016
Units
Batting helmet
Football helmet
Expected units to be sold
1,200
6,500
Plus desired inventory, March 31, 2016
50
220
Total
1,250
6,720
Less estimated inventory, March 1, 2016
40
240
Total units to be produced
1,210
6,480
3. Direct materials purchases budget for March
Gold Medal Athletic Co.
Direct Materials Purchases Budget
For the Month Ending March 31, 2016
Plastic
Foam Lining
Total
Units required for production:
Batting helmet
1452
605
2057
Football helmet
22680
9720
32400
Plus desired units of inventory, March 31, 2016
50
65
115
Total
24182
10390
34572
Less estimated units of inventory, March 1, 2016
90
80
170
Total units to be purchased
24092
10310
34402
Unit price
$6
$4
10
Total direct materials to be purchased
$144,552
$41,240
$185,792
Note – In the question required quantity of football helmet is given as follows, it should be Plastic in place of Batting Helmet and Foam lining in place of Football helmet in the below place:
In manufacture of football helmet:
Batting helmet
3.50 lbs. per unit of product
Football helmet
1.50 lbs. per unit of product
4. Direct labor cost budget for March.
Gold Medal Athletic Co.
Direct Labor Cost Budget
For the Month Ending March 31, 2016
Molding Department
Assembly Department
Total
Hours required for production:
Batting helmet
242
605
847
Football helmet
3240
11664
14904
Total
3482
12269
15751
Hourly rate
$20
$14
Total direct labor cost
$69,640
$171,766
$241,406
Please ask separate question for rest requirements..
Gold Medal Athletic Co.
Sales Budget
For the Month Ending March 31, 2016
Unit Sales Volume
Unit Selling Price
Total Sales
Batting helmet
1,200
$40
$48,000
Football helmet
6,500
$160
$1,040,000
Total revenue from sales
$1,088,000
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