PR 22-3B Budgeted income statement and supporting budgets Obj. 4 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: Excel a. Estimated sales for March: Batting helmet... Football helmet 1,200 units at $40 per unit 6,500 units at $160 per unit b. Estimated inventories at March 1: Direct materials: Plastic... Foam lining........ 90 lb. 80 lb. Finished products: Batting helmet.... Football helmet....... + 40 units at $25 per unit 240 units at $77 per unit c. Desired inventories at March 31: + Direct materials: Plastic..... Foam lining........ 50 lb. 65 lb. Finished products: Batting helmet.... Football helmet ........ 50 units at $25 per unit 220 units at $78 per unit d. Direct materials used in production: In manufacture of batting helmet: Plastic.. Foam lining.. In manufacture of football helmet: Plastic.... Foam lining 1.20 lb. per unit of product 0.50 lb. per unit of product 3.50 lb. per unit of product 1.50 lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic... Foam lining. $6.00 per Ib. $4.00 per lb. f. Direct labor requirements: 0.20 hr. at $20 per hr. 0.50 hr. at $14 per hr. Batting helmet: Molding Department. Assembly Department. Football helmet: Molding Department. Assembly Department. 0.50 hr. at $20 per hr. 1.80 hrs. at $14 per hr. g. Estimated factory overhead costs for March: Indirect factory wages Depreciation of plant and equipment $86,000 12,000 Power and light Insurance and property tax $4,000 2,300 h. Estimated operating expenses for March: Sales salaries expense Advertising expense Office salaries expense $184,300 87,200 32,400 h. Estimated operating expenses for March: Sales salaries expense Advertising expense Office salaries expense Depreciation expense-office equipment Telephone expense-selling Telephone expense-administrative Travel expense--selling Office supplies expense Miscellaneous administrative expense $184,300 87,200 32,400 3,800 5,800 1,200 9,000 1,100 1,000 i. Estimated other income and expense for March: Interest revenue Interest expense $940 872 j. Estimated tax rate: 30% 6 GOLD MEDAL ATHLETIC CO. Cost of Goods Sold Budget For the Month Ending March 31 Direct materials: Direct materials purchases Cost of direct materials available for use Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during period Cost of goods manufactured Cost of finished goods available for sale Cost of goods sold Supporting calculations: Units Cost Total Finished goods inventory, March 1: Batting helmet Football helmet Total Finished goods inventory, March 31: Batting helmet Football helmet Total Direct materials inventory, March 1 Plastic Foam lining Total Direct materials inventory, March 31 Plastic Foam lining Total 7. GOLD MEDAL ATHLETIC CO. Selling and Administrative Expenses Budget For the Month Ending March 31 Selling expenses: Total selling expenses Administrative expenses: Total administrative expenses Total operating expenses 8. GOLD MEDAL ATHLETIC CO. Budgeted Income Statement For the Month Ending March 31 8. GOLD MEDAL ATHLETIC CO. Budgeted Income Statement For the Month Ending March 31 Revenue from sales Cost of goods sold Gross profit Operating expenses: Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue and expense: Interest revenue Interest expense Income before income tax Income tax expense Net income