Financial and Managerial Accounting: PR21-3B The budget director of Gold Medal Athletic Co.

Financial and Managerial Accounting 
PR21-3B 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: 
a. Estimated sales for March: 
Batting helmet 1,200 units at $40 per unit 
Football helmet 6,500 units at $160 per unit 

b. Estimated inventories at March 1: 
Direct materials: Finished products: 
Plastic 90lbs Batting helmet 40 units at $25 per unit 
Foam lining 80lbs Football helmet 240 units at $77 per unit 

c. Desired inventories at March 31: 
Direct materials: Finished products: 
Plastic 50lbs Batting helmet 50 units at $25 per unit 
Foam lining 65lbs Football helmet 220 units at $78 per unit 

d. Direct materials used in production: 
In manufacture of batting helmet: 
Plastic 1.20 lbs per unit of product 
Foam lining 0.50 lb per unit of product 
In manufacture of football helmet: 
Plastic 3.50 lbs per unit of product 
Foam lining 1.50 lbs per unit of product 

e. Anticipated cost of purchases and beginning and ending inventory of direct materials: 
Plastic $6.00 per lb. 
Foam lining $4.00 per lb. 

f. Direct labor requirements: 
Batting Helmet: 
Molding Department 0.20 hr at $20 per hr. 
Assembly Department 0.50 hr at $14 per hr. 
Football Helmet: 
Molding Department 0.50 hr at $20 per hr. 
Assembly Department 1.80 hr at $14 per hr. 

g. Estimated factory overhead costs for March: 
Indirect factory wages 86,000 
Depreciation of plant and equipment 12,000 
Power and light 4,000 
Insurance and property tax 2,300 

h. Estimated operating expenses for March: 
Sales salaries expense 184,300 
Advertising expense 87,200 
Office salaries expense 32,400 
Depreciation expense - office equipment 3,800 
Telephone expense - selling 5,800 
Telephone expense - administrative 1,200 
Travel expense - selling 9,000 
Office supplies expense 1,100 
Miscellaneous administrative expense 1,000 

i. Estimated other income and expense for March: 
Interest revenue 940 
Interest expense 872 

j. 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.
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