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(Solved): Budgeted Income Statement And Supporting Budgets The Budget Director Of Jupiter Helmets Inc., With T ...

Budgeted Income Statement and Supporting Budgets

The budget director of Jupiter Helmets Inc., 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 May:

a. Estimated sales for May:

Bicycle helmet 8,500 units at $24 per unit
Motorcycle helmet 5,500 units at $180 per unit

b. Estimated inventories at May 1:

Direct materials: Finished products:
   Plastic 1,480 lbs.    Bicycle helmet 200 units at $15 per unit
   Foam lining 520 lbs.    Motorcycle helmet 100 units at $90 per unit

c. Desired inventories at May 31:

Direct materials: Finished products:
   Plastic 2,000 lbs.    Bicycle helmet 400 units at $15 per unit
   Foam lining 800 lbs.    Motorcycle helmet 300 units at $100 per unit

d. Direct materials used in production:

In manufacture of bicycle helmet:
   Plastic 0.90 lb. per unit of product
   Foam lining 0.20 lb. per unit of product
In manufacture of motorcycle helmet:
   Plastic 3.50 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 materials:

Plastic $4.40 per lb.
Foam lining $0.90 per lb.

f. Direct labor requirements:

Bicycle helmet:
   Molding Department 0.30 hr. at $15 per hr.
   Assembly Department 0.10 hr. at $14 per hr.
Motorcycle helmet:
   Molding Department 0.50 hr. at $15 per hr.
   Assembly Department 0.40 hr. at $14 per hr.

g. Estimated factory overhead costs for May:

Indirect factory wages $125,000 Power and light $23,000
Depreciation of plant and equipment 45,000 Insurance and property tax 11,000

h. Estimated operating expenses for May:

Sales salaries expense $175,000
Advertising expense 120,000
Office salaries expense 92,000
Depreciation expense—office equipment 6,000
Miscellaneous expense—selling 5,000
Utilities expense—administrative 3,000
Travel expense—selling 50,000
Office supplies expense 2,500
Miscellaneous administrative expense 1,500

i. Estimated other income and expense for May:

Interest revenue $14,560
Interest expense 3,000

j. Estimated tax rate: 25%

Required:

1. Prepare a sales budget for May.

Jupiter Helmets Inc.
Sales Budget
For the Month Ending May 31
Unit Sales Volume Unit Selling Price Total Sales
Bicycle helmet $ $
Motorcycle helmet
Total revenue from sales $

2. Prepare a production budget for May.

Jupiter Helmets Inc.
Production Budget
For the Month Ending May 31
Bicycle Helmet Units Motorcycle Helmet Units
Expected units to be sold
Total
Total units to be produced

3. Prepare a direct materials purchases budget for May.

Jupiter Helmets Inc.
Direct Materials Purchases Budget
For the Month Ending May 31
Plastic Foam Lining Total
Units required for production:
Bicycle helmet
Motorcycle helmet
Total
Total units to be purchased
Unit price $ $
Total direct materials to be purchased $ $ $

Expert Answer


Answers [1] Jupiter Helmets Inc. Sales Budget For the Month Ending May 31 Unit Sales Volume Unit Selling Price Total Sales Bicycle helmet 8500 $24 $204,000 Motorcycle helmet 5500 $180 $990,000 Tota
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