P22-47B Preparing an Operating Budget-Sales, Production, Direct Materials, Direct Labor, Overhead, COGS, and S&A Expense Budgets

The Irwin Batting Company manufactures wood baseball bats. Irwin's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Irwin sells the bats to sporting good stores, and all sales are on account. The youth bat sells for $35; the adult bat sells for $50. Irwin's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Irwin's balance sheet for December 31, 2018, follows:

IRWIN BATTING COMPANY Balance Sheet December 31, 2018 Assets Current Assets: Accounts Receivable Raw Materials Inventory Finished Goods Inventory Total Current Assets $20,000 18,500 9,000 16,000 $63,500 Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation 130,000 (70,000) 60,000 Total Assets $123,500 Liabilities Current Liabilities: Accounts Payable $11,600 Stockholders' Equity $ 90,000 Common Stock, no par Retained Earnings 21,900 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 111,900 $123,500