Budgeted Income Statement and Supporting Budgets The budget director of Gold Med
ID: 2499032 • 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 2014:
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.
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 2014:
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.
Gold Medal Athletic Co.Sales Budget
For the Month Ending March 31, 2014 Unit Sales
Volume Unit Selling
Price Total Sales Batting helmet $ $ Football helmet Total revenue from sales $
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, 2014 Units Batting helmet Football helmet Expected units to be sold Plus desired inventory, March 31, 2014 Total Less estimated inventory, March 1, 2014 Total units to be produced
3. Prepare a direct materials purchases budget for March. Enter all amounts as positive numbers.
Gold Medal Athletic Co.Direct Materials Purchases Budget
For the Month Ending March 31, 2014 Plastic Foam Lining Total Units required for production: Batting helmet Football helmet Plus desired units of inventory, March 31, 2014 Total Less estimated units of inventory, March 1, 2014 Total units to be purchased Unit price $ $ Total direct materials to be purchased $ $ $
4. Prepare a direct labor cost budget for March. Enter all amounts as positive numbers.
Gold Medal Athletic Co.Direct Labor Cost Budget
For the Month Ending March 31, 2014 Molding
Department Assembly
Department Total Hours required for production: Batting helmet Football helmet Total Hourly rate $ $ Total direct labor cost $ $ $
5. Prepare a factory overhead cost budget for March. Enter all amounts as positive numbers.
Gold Medal Athletic Co.Factory Overhead Cost Budget
For the Month Ending March 31, 2014 Indirect factory wages $ Depreciation of plant and equipment Power and light Insurance and property tax Total $
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.
Gold Medal Athletic Co.Cost of Goods Sold Budget
For the Month Ending March 31, 2014 SelectDirect materials inventory, March 1, 2014Direct materials inventory, March 31, 2014Direct materials purchasesFactory OverheadFinished goods inventory, March 1, 2014Finished goods inventory, March 31, 2014Item 51 SelectDirect materials inventory, March 1, 2014Direct materials inventory, March 31, 2014Direct materials purchasesFactory OverheadWork in process inventory, March 1, 2014Work in process inventory, March 31, 2014Item 53 Direct materials: SelectDirect materials inventory, March 1, 2014Direct materials inventory, March 31, 2014Finished goods inventory, March 1, 2014Finished goods inventory, March 31, 2014Work in process inventory, March 1, 2014Work in process inventory, March 31, 2014Item 55 SelectDirect laborDirect materials purchasesFactory overheadFinished goods inventory, March 31, 2014Work in process inventory, March 1, 2014Work in process inventory, March 31, 2014Item 57 Cost of direct materials available for use SelectLess: Direct materials inventory, March 1, 2014Less: Direct materials inventory, March 31, 2014Less: Finished goods inventory, March 1, 2014Less: Finished goods inventory, March 31, 2014Less: Work in process inventory, March 1, 2014Less: Work in process inventory, March 31, 2014Item 60 Cost of direct materials placed in production SelectDirect laborDirect materials purchasesFinished goods inventory, March 1, 2014Finished goods inventory, March 31, 2014Work in process inventory, March 1, 2014Work in process inventory, March 31, 2014Item 63 SelectDirect materials purchasesFactory overheadFinished goods inventory, March 1, 2014Finished goods inventory, March 31, 2014Work in process inventory, March 1, 2014Work in process inventory, March 31, 2014Item 65 Total manufacturing costs Total work in process during the period SelectLess: Direct materials inventory, March 1, 2014Less: Direct materials inventory, March 31, 2014Less: Finished goods inventory, March 1, 2014Less: Finished goods inventory, March 31, 2014Less: Work in process inventory, March 1, 2014Less: Work in process inventory, March 31, 2014Item 69 Cost of goods manufactured Cost of finished goods available for sale SelectLess: Direct materials inventory, March 1, 2014Less: Direct materials inventory, March 31, 2014Less: Finished goods inventory, March 1, 2014Less: Finished goods inventory, March 31, 2014Less: Work in process inventory, March 1, 2014Less: Work in process inventory, March 31, 2014Item 73 Cost of goods sold
7. Prepare a selling and administrative expenses budget for March. Enter all amounts as positive numbers.
Gold Medal Athletic Co.Selling and Administrative Expenses Budget
For the Month Ending March 31, 2014 Selling expenses: Sales salaries expense Advertising expense Telephone expense—selling Travel expense—selling Total selling expenses Administrative expenses: Office salaries expense Depreciation expense—office equipment Telephone expense—administrative Office supplies expense Miscellaneous administrative expense Total administrative expenses Total operating expenses
8. Prepare a budgeted income statement for March. Enter all amounts as positive numbers.
Gold Medal Athletic Co.Budgeted Income Statement
For the Month Ending March 31, 2014 SelectGross profitIncome before income taxInterest expenseInterest revenueRevenue from salesItem 88 SelectAdministrative expensesCost of goods soldIncome tax expenseInterest expenseSelling expensesItem 90 SelectGross profitInterest revenueNet incomeNet lossRevenue from salesItem 92 Operating expenses: SelectCost of goods soldInterest revenueNet incomeNet lossSelling expensesItem 94 SelectAdministrative expensesGross profitInterest revenueNet incomeNet lossItem 96 Total operating expenses Income from operations Other income: SelectGross profitInterest expenseInterest revenueNet incomeRevenue from salesItem 100 Other expenses: SelectCost of goods soldGross profitInterest expenseInterest revenueNet lossItem 102 Income before income tax SelectCost of goods soldGross profitIncome tax expense (30% rate)Interest revenueNet lossItem 106 Net income
Explanation / Answer
1. Sales Budget
2. Production Budget
3. Direct Material Purchases Budget
4. Direct labor cost budget
Unit sale volume Unit selling price Total Sales Batting helmet 1200 40 48000 Football helmet 6500 160 1040000 Total Revenue from sales 1088000Related Questions
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