Budgeted Income Statement and Supporting Budgets The budget director of Gold Med
ID: 2541468 • 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.
Check My Work
Batting helmet 1,200 units at $40 per unit Football helmet 6,500 units at $160 per unitExplanation / Answer
Solution:
Part 1 – Sales Budget
Sales Budget
Unit Sales Volume
Unit Selling Price
Total Sales
Batting Helmet
1200
$40
$48,000
Football Helmet
6500
$160
$1,040,000
Total Revenue from Sales
$1,088,000
Part 2 – Production Budget
Production Budget
For the year Ended March 31
Batting Helmet
Football Helmet
Expected Units to be sold
1200
6500
Plus: Desired Inventory December 31
50
220
Total Need
1250
6720
Less: Estimated inventory December 1
40
240
Total Units to be produced
1210
6480
Part 3 --- Direct materials purchase budget
Direct Materials Purchases Budget
Plastic
Foam lining
Total
Units required for production:
Batting Helmet
1452
(1210*1.2)
605
(1210*0.5)
Football helmet
22680
(6480*3.5)
9720
(6480*1.5)
Plus: Desired Inventory December 31
50
65
Total
24182
10390
Less: Estimated inventory December 1
90
80
Total units to be purchased
24092
10310
Unit Price
6
4
Total direct materials to be purchased
$144,552
$41,240
$185,792
Part 4 --- Direct labor cost budget
Direct labor Cost budget
Molding Department
Assembly Department
Total
Hours required for Production:
Batting Helmet
242
(1210*0.2)
605
(1210*0.5)
Football helmet
3240
(6480*0.5)
11664
(6480*1.8)
Total
3482
12269
Hourly Rate
$20
$14
Total Direct labor cost
$69,640
$171,766
$241,406
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Pls ask separate question for remaining parts.
Sales Budget
Unit Sales Volume
Unit Selling Price
Total Sales
Batting Helmet
1200
$40
$48,000
Football Helmet
6500
$160
$1,040,000
Total Revenue from Sales
$1,088,000
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