Check My Work (2 remaining) eBook Problem-Solving StrategyBudgeted Income Statement and Supporting Budgets The budgetdirector of Gold Medal Athletic Co., with the assistance of thecontroller, treasurer, production manager, and sales manager, hasgathered the following data for use in developing the budgetedincome statement for March 2014: a.Estimated sales for March:b.Estimated inventories at March 1: c.Desired inventories at March31: d.Direct materials used in production: e.Anticipated cost ofpurchases and beginning and ending inventory of direct materials:f.Direct labor requirements: g.Estimated factory overhead costs forMarch: h.Estimated operating expenses for March: i.Estimated otherincome and expense for March: j.Estimated tax rate: 30% Required:1. Prepare a sales budget for March. Enter all amounts as positivenumbers. Gold Medal Athletic Co. Sales Budget For the Month EndingMarch 31, 2014 Unit Sales Volume Unit Selling Price Total SalesBatting helmet $ $ Football helmet Total revenue from sales $ 2.Prepare a production budget for March. Enter all amounts aspositive numbers. Gold Medal Athletic Co. Production Budget For theMonth Ending March 31, 2014 Units Batting helmet Football helmetExpected units to be sold Plus desired inventory, March 31, 2014Total Less estimated inventory, March 1, 2014 Total units to beproduced 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 directmaterials to be purchased $ $ $ 4. Prepare a direct labor costbudget for March. Enter all amounts as positive numbers. Gold MedalAthletic Co. Direct Labor Cost Budget For the Month Ending March31, 2014 Molding Department Assembly Department Total Hoursrequired for production: Batting helmet Football helmet TotalHourly rate $ $ Total direct labor cost $ $ $ 5. Prepare a factoryoverhead cost budget for March. Enter all amounts as positivenumbers. Gold Medal Athletic Co. Factory Overhead Cost Budget Forthe Month Ending March 31, 2014 Indirect factory wages $Depreciation of plant and equipment Power and light Insurance andproperty tax Total $ 6. Prepare a cost of goods sold budget forMarch. 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 AthleticCo. Cost of Goods Sold Budget For the Month Ending March 31, 2014SelectDirect materials inventory, March 1, 2014Direct materialsinventory, March 31, 2014Direct materials purchasesFactoryOverheadFinished goods inventory, March 1, 2014Finished goodsinventory, March 31, 2014 SelectDirect materials inventory, March1, 2014Direct materials inventory, March 31, 2014Direct materialspurchasesFactory OverheadWork in process inventory, March 1,2014Work in process inventory, March 31, 2014 Direct materials:SelectDirect materials inventory, March 1, 2014Direct materialsinventory, March 31, 2014Finished goods inventory, March 1,2014Finished goods inventory, March 31, 2014Work in processinventory, March 1, 2014Work in process inventory, March 31, 2014SelectDirect laborDirect materials purchasesFactoryoverheadFinished goods inventory, March 31, 2014Work in processinventory, March 1, 2014Work in process inventory, March 31, 2014Cost of direct materials available for use SelectLess: Directmaterials inventory, March 1, 2014Less: Direct materials inventory,March 31, 2014Less: Finished goods inventory, March 1, 2014Less:Finished goods inventory, March 31, 2014Less: Work in processinventory, March 1, 2014Less: Work in process inventory, March 31,2014 Cost of direct materials placed in production SelectDirectlaborDirect materials purchasesFinished goods inventory, March 1,2014Finished goods inventory, March 31, 2014Work in processinventory, March 1, 2014Work in process inventory, March 31, 2014SelectDirect materials purchasesFactory overheadFinished goodsinventory, March 1, 2014Finished goods inventory, March 31,2014Work in process inventory, March 1, 2014Work in processinventory, March 31, 2014 Total manufacturing costs Total work inprocess during the period SelectLess: Direct materials inventory,March 1, 2014Less: Direct materials inventory, March 31, 2014Less:Finished goods inventory, March 1, 2014Less: Finished goodsinventory, March 31, 2014Less: Work in process inventory, March 1,2014Less: Work in process inventory, March 31, 2014 Cost of goodsmanufactured Cost of finished goods available for sale SelectLess:Direct materials inventory, March 1, 2014Less: Direct materialsinventory, March 31, 2014Less: Finished goods inventory, March 1,2014Less: Finished goods inventory, March 31, 2014Less: Work inprocess inventory, March 1, 2014Less: Work in process inventory,March 31, 2014 Cost of goods sold 7. Prepare a selling andadministrative expenses budget for March. Enter all amounts aspositive numbers. Gold Medal Athletic Co. Selling andAdministrative Expenses Budget For the Month Ending March 31, 2014Selling expenses: Sales salaries expense Advertising expenseTelephone expense—selling Travel expense—selling Total sellingexpenses Administrative expenses: Office salaries expenseDepreciation expense—office equipment Telephoneexpense—administrative Office supplies expense Miscellaneousadministrative expense Total administrative expenses Totaloperating expenses 8. Prepare a budgeted income statement forMarch. Enter all amounts as positive numbers. Gold Medal AthleticCo. Budgeted Income Statement For the Month Ending March 31, 2014SelectGross profitIncome before income taxInterest expenseInterestrevenueRevenue from sales SelectAdministrative expensesCost ofgoods soldIncome tax expenseInterest expenseSelling expensesSelectGross profitInterest revenueNet incomeNet lossRevenue fromsales Operating expenses: SelectCost of goods soldInterestrevenueNet incomeNet lossSelling expenses SelectAdministrativeexpensesGross profitInterest revenueNet incomeNet loss Totaloperating expenses Income from operations Other income: SelectGrossprofitInterest expenseInterest revenueNet incomeRevenue from salesOther expenses: SelectCost of goods soldGross profitInterestexpenseInterest revenueNet loss Income before income tax SelectCostof goods soldGross profitIncome tax expense (30% rate)InterestrevenueNet loss Net income
