The budget director of Gold Medal Athletic Co., with the assistance of the contr

Question

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.

Explanation / Answer

Req 1: Sales Budget GOLD MEDAL ATHELETIC COMPANY SALES BUDGET FOR THE MONTH ENDING MARCH 31 Units Sales Volume Units Selling Price Total Sales Batting Helmet 1200 40 48000 Football Helmet 6500 160 1040000 Total Revenue from Sales 1088000 Req 2: Production Budget GOLD MEDAL ATHELETIC COMPANY PRODUCTION BUDGET FOR THE MONTH ENDING MARCH 31 UNITS Batting Helmet Football Helmet Expected Sales units 1200 6500 Add: Desired Ending Inventory 50 220 Less: Desired Inventory Beginning 40 240 Budgeted Production Units 1210 6480 Req 3: material Purchase budget GOLD MEDAL ATHELETIC COMPANY Purchase BUDGET FOR THE MONTH ENDING MARCH 31 PLASTIC FOAMING TOTAL Units required for production: Batting Helmet 1452 605 (1210 units@1.2 lbs) (1210 units@0.5 lb) Football Helmet 22680 9720 (6480 units@ 3.5 lbs) (6480 units@ 1.5 lb) Total Material Requirement 24132 10325 Add: Desired Ending Inventory, Mar 31 50 65 Total Units Available 24182 10390 Less: Estimated Inventory Mar 1 90 80 Total Units to be Purchased 24092 10310 Unit Price 6 4 Total Direct material To be purchased 144552 41240 185792 Req 4: Direct Labour cost Budget GOLD MEDAL ATHELETIC COMPANY LABOUR COSTBUDGET FOR THE MONTH ENDING MARCH 31 MOLDING ASSEMBLY TOTAL Hours Required for production: Batting Helmet 242 605 (1210 units@0.2 hr) (1210 units@0.5 hr) Football Helmet 3240 11664 (6480 units@ 0.5 hr) (6480 units@ 1.8 hr) Total hours required 3482 12269 Hourly rate 20 14 Total Direct labour cost 69640 171766 241406

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