“The budget director of Hi Performance 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 January 2012:22.214.171.124.5.6.Estimated sales for JanuaryBatting helmet 305 units at $70 per unit Football helmet 630 units at $135 per unitEstimated inventories at January 1 Direct Materials:Plastic 80 lbs. Foam lining 60 lbs.Desired inventories at January 31: Direct Materials:Plastic 90 lbs. Foam lining 55 lbs.Direct materials used in production: In manufacture of batting helmet:Finished products: Batting helmet Football helmetFinished products: Batting helmet Football helmet35 units @ $40 each 40 units @ $60 each30 units @ $40 each 50 units @ $58 eachPlastic 1.20 lbs. per unit of productFoam lining 0.50 lbs per unit of product In manufacture of football helmet:Plastic 2.80 lbs. per unit of product Foam lining 1.40 lbs. per unit of productAnticipated cost of purchase and beginning and ending inventory of direct materials: Plastic $ 5.50 per lb.Foam lining $ 4.00 per lb.Direct labor requirements: Batting helmet:Molding DepartmentAssembly Department Football helmet:Molding Department Assembly Department0.20 hr. at $15 per hour 0.50 hr at $13 per hour0.30 hr. at $ 15 per hour 0.65 hr. at $ 13 per hour7. Estimated factory overhead costs for January:Indirect factory wages Depreciation of equipment PowerInsurance$ 14,500 4,200 2,000 1,7008. Estimated operating expenses for January:Sales salariesAdvertisingOffice salariesDepreciation Office Equip. Telephone – Selling Telephone – Administrative Travel – SellingOffice supplies Miscellaneous Administrative$ 15,400 8,50011,500 3,200 950 600 2,300 550 4009. Estimated other income and expense for January: Interest revenue $ 140Interest expense 17210. Estimated tax rate 30%Instructions: Prepare a sales budget for January Prepare a production budget for January Prepare a direct materials purchases budget for January Prepare a direct labor cost budget for January Prepare a factory overhead budget for January. The company records overhead based uponactual cost for the month in the work in process account. Prepare a cost of goods sold budget for January. Work in process at the beginning ofJanuary is estimated to be $ 12,500 and work in process at the end of January is desired tobe $ 13,500. Prepare a selling and administrative expenses budget for January Prepare a budgeted income statement for January.”
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