treasurer, production manger, and sales manager, has gathered the following data for
use in developing the budgeted income statement for January 2012.
a. Estimated sales for January
Batting helmets 305 unites @$70 per unit
Football helmet 630 units @$135 per unit
b. Estimated inventories at January
Direct materials: Finished products:
Plastic 80-lbs Batting helmet 35 units @$40 per unit
Foam lining 60-lbs Football helmet 40 units @$60 per unit
c. Desired Inventories at January 31:
Direct materials: Finished products:
Plastic 90-lbs Batting helmet 30 units @40 per unit
Foam lining 55-lbs Football helmet 50 units @$58 per unit
d. Direct materials used in production:
In manufacturing of batting helmet:
Plastic 1.20-lbs. per unit of product
Foam lining 0.50-lb. per unit of product
In manufacturing of football helmet
Plastic 2.80-lbs. per unit of product
Foam lining 1.40-lbs. per unit of product
e. Anticipated cost of purchases and beginning and ending inventory of direct material:
Plastic $5.50 per lb.
Foam lining $4.00 per lb.
f. Direct labor requirements:
Batting helmet:
Molding department 0.20 hr. @$15 per hr.
Assembly department 0.50 hr. @$13 per hr.
Football helmet
Molding department 0.30 hr. @$15 per hr.
Assembly department 0.65 hr. @$13 per hr.
g. Estimated factory overhead costs for January:
Indirect factory wages $14,500; Power and light $2,000
Depreciation of plant &
equipment $4,200
Insurance &property tax $1,700
h. Estimated operating expenses for January:
Sales salary expense $15,400
Advertising expense $8,500
Office salaries expense $11,500
Depreciation expense – office equipment $3,200
Telephone expense – selling $950
Telephone expense – administrative $600
Travel expense – selling $2,300
Office supplies expense $550
Miscellaneous administrative expense $00
i. Estimated other income and expense fro January:
Interest revenue $140
Interest expense $172
j. Estimated tax rate: 30%
Instructions: using Excel with the appropriate formulas do the following using one sheet for each.
1 Prepare a sales budget for January
2 Prepare a production budget for January
3 Prepare a direct materials purchases budget fro January
4 Prepare a direct labor cost budget for January
5 Prepare a factory overhead cost budget for January
6 Prepare a cost of goods sold budget for January. Work-in process at the beginning
of January is estimated at $12,500, and work in process at the end of January is
desired to be $13,500.
7 Prepare a selling and administrative expense budget for January
8 Prepare a budgeted income statement for January
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