Check My Work (2 remaining) eBook Problem-Solving Strategy Budgeted Income State
ID: 2425523 • Letter: C
Question
Check My Work (2 remaining) eBook Problem-Solving Strategy 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: b.Estimated inventories at March 1: c.Desired inventories at March 31: d.Direct materials used in production: e.Anticipated cost of purchases and beginning and ending inventory of direct materials: f.Direct labor requirements: g.Estimated factory overhead costs for March: h.Estimated operating expenses for March: i.Estimated other income and expense for March: j.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, 2014 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, 2014 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, 2014 SelectDirect laborDirect materials purchasesFactory overheadFinished goods inventory, March 31, 2014Work in process inventory, March 1, 2014Work in process inventory, March 31, 2014 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, 2014 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, 2014 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, 2014 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, 2014 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, 2014 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 sales SelectAdministrative expensesCost of goods soldIncome tax expenseInterest expenseSelling expenses SelectGross profitInterest revenueNet incomeNet lossRevenue from sales Operating expenses: SelectCost of goods soldInterest revenueNet incomeNet lossSelling expenses SelectAdministrative expensesGross profitInterest revenueNet incomeNet loss Total operating expenses Income from operations Other income: SelectGross profitInterest expenseInterest revenueNet incomeRevenue from sales Other expenses: SelectCost of goods soldGross profitInterest expenseInterest revenueNet loss Income before income tax SelectCost of goods soldGross profitIncome tax expense (30% rate)Interest revenueNet loss Net income
Explanation / Answer
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 Unit Selling Total Sales Volume Price Batting helmet 1200 40 48,000 Football helmet 6500 160 1,040,000 Total revenue from sales 1,088,000 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 1200 6500 Plus desired inventory, March 31, 2014 50 220 Total 1250 6720 Less estimated inventory, March 1, 2014 40 240 Total units to be produced 1210 6480 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 1452 605 Football helmet 22680 9720 Plus desired units of inventory, March 31, 2014 50 65 Total 24182 10390 Less estimated units of inventory, March 1, 2014 90 80 Total units to be purchased 24092 10310 Unit price 6 4 Total direct materials to be purchased 144552 41240 185792 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 Assembly Total Department Department Hours required for production: Batting helmet 242 605 Football helmet 3240 11664 Total 3482 12269 Hourly rate 20 14 Total direct labor cost 69640 171766 241406 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 86000 Depreciation of plant and equipment 12000 Power and light 4000 Insurance and property tax 2300 Total 104300