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 9,500 units at $24 per unit Motorcycle helmet 6,250 units at $185 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 BudgetFor the Month Ending May 31 Unit Sales Volume Unit Selling Price Total Sales Bicycle helmet fill in the blank e5e776085f9407a_1 $fill in the blank e5e776085f9407a_2 $fill in the blank e5e776085f9407a_3 Motorcycle helmet fill in the blank e5e776085f9407a_4 fill in the blank e5e776085f9407a_5 fill in the blank e5e776085f9407a_6 Total revenue from sales $fill in the blank e5e776085f9407a_7 Feedback 2. Prepare a production budget for May. Jupiter Helmets Inc.Production BudgetFor the Month Ending May 31 Bicycle Helmet Units Motorcycle Helmet Units Expected units to be sold fill in the blank 7bbb60057fa0f94_1 fill in the blank 7bbb60057fa0f94_2 Plus desired inventory, May 31 Plus desired inventory, May 31 Total fill in the blank 7bbb60057fa0f94_6 fill in the blank 7bbb60057fa0f94_7 Less estimated inventory, May 1 Less estimated inventory, May 1 Total units to be produced fill in the blank 7bbb60057fa0f94_11 fill in the blank 7bbb60057fa0f94_12 Feedback 3. Prepare a direct materials purchases budget for May. Jupiter Helmets Inc.Direct Materials Purchases BudgetFor the Month Ending May 31 Direct Materials Plastic Foam Lining Total Units required for production: Bicycle helmet fill in the blank 20b99a029fb4014_1 fill in the blank 20b99a029fb4014_2 Motorcycle helmet fill in the blank 20b99a029fb4014_3 fill in the blank 20b99a029fb4014_4 Plus desired units of inventory, May 31 Plus desired units of inventory, May 31 Total fill in the blank 20b99a029fb4014_8 fill in the blank 20b99a029fb4014_9 Less estimated units of inventory, May 1 Less estimated units of inventory, May 1 Total units to be purchased fill in the blank 20b99a029fb4014_13 fill in the blank 20b99a029fb4014_14 Unit price $fill in the blank 20b99a029fb4014_15 $fill in the blank 20b99a029fb4014_16 Total direct materials to be purchased $fill in the blank 20b99a029fb4014_17 $fill in the blank 20b99a029fb4014_18 $fill in the blank 20b99a029fb4014_19 Feedback 4. Prepare a direct labor cost budget for May. Jupiter Helmets Inc.Direct Labor Cost BudgetFor the Month Ending May 31 Molding Department Assembly Department Total Hours required for production: Bicycle helmet fill in the blank bfe82a0c7fd3ffb_1 fill in the blank bfe82a0c7fd3ffb_2 Motorcycle helmet fill in the blank bfe82a0c7fd3ffb_3 fill in the blank bfe82a0c7fd3ffb_4 Total fill in the blank bfe82a0c7fd3ffb_5 fill in the blank bfe82a0c7fd3ffb_6 Hourly rate $fill in the blank bfe82a0c7fd3ffb_7 $fill in the blank bfe82a0c7fd3ffb_8 Total direct labor cost $fill in the blank bfe82a0c7fd3ffb_9 $fill in the blank bfe82a0c7fd3ffb_10 $fill in the blank bfe82a0c7fd3ffb_11

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 9,500 units at $24 per unit Motorcycle helmet 6,250 units at $185 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 BudgetFor the Month Ending May 31 Unit Sales Volume Unit Selling Price Total Sales Bicycle helmet fill in the blank e5e776085f9407a_1 $fill in the blank e5e776085f9407a_2 $fill in the blank e5e776085f9407a_3 Motorcycle helmet fill in the blank e5e776085f9407a_4 fill in the blank e5e776085f9407a_5 fill in the blank e5e776085f9407a_6 Total revenue from sales $fill in the blank e5e776085f9407a_7 Feedback 2. Prepare a production budget for May. Jupiter Helmets Inc.Production BudgetFor the Month Ending May 31 Bicycle Helmet Units Motorcycle Helmet Units Expected units to be sold fill in the blank 7bbb60057fa0f94_1 fill in the blank 7bbb60057fa0f94_2 Plus desired inventory, May 31 Plus desired inventory, May 31 Total fill in the blank 7bbb60057fa0f94_6 fill in the blank 7bbb60057fa0f94_7 Less estimated inventory, May 1 Less estimated inventory, May 1 Total units to be produced fill in the blank 7bbb60057fa0f94_11 fill in the blank 7bbb60057fa0f94_12 Feedback 3. Prepare a direct materials purchases budget for May. Jupiter Helmets Inc.Direct Materials Purchases BudgetFor the Month Ending May 31 Direct Materials Plastic Foam Lining Total Units required for production: Bicycle helmet fill in the blank 20b99a029fb4014_1 fill in the blank 20b99a029fb4014_2 Motorcycle helmet fill in the blank 20b99a029fb4014_3 fill in the blank 20b99a029fb4014_4 Plus desired units of inventory, May 31 Plus desired units of inventory, May 31 Total fill in the blank 20b99a029fb4014_8 fill in the blank 20b99a029fb4014_9 Less estimated units of inventory, May 1 Less estimated units of inventory, May 1 Total units to be purchased fill in the blank 20b99a029fb4014_13 fill in the blank 20b99a029fb4014_14 Unit price $fill in the blank 20b99a029fb4014_15 $fill in the blank 20b99a029fb4014_16 Total direct materials to be purchased $fill in the blank 20b99a029fb4014_17 $fill in the blank 20b99a029fb4014_18 $fill in the blank 20b99a029fb4014_19 Feedback 4. Prepare a direct labor cost budget for May. Jupiter Helmets Inc.Direct Labor Cost BudgetFor the Month Ending May 31 Molding Department Assembly Department Total Hours required for production: Bicycle helmet fill in the blank bfe82a0c7fd3ffb_1 fill in the blank bfe82a0c7fd3ffb_2 Motorcycle helmet fill in the blank bfe82a0c7fd3ffb_3 fill in the blank bfe82a0c7fd3ffb_4 Total fill in the blank bfe82a0c7fd3ffb_5 fill in the blank bfe82a0c7fd3ffb_6 Hourly rate $fill in the blank bfe82a0c7fd3ffb_7 $fill in the blank bfe82a0c7fd3ffb_8 Total direct labor cost $fill in the blank bfe82a0c7fd3ffb_9 $fill in the blank bfe82a0c7fd3ffb_10 $fill in the blank bfe82a0c7fd3ffb_11

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 4E: Prepare a cost of goods sold budget for the Crest Hills Manufacturing Co. for the year ended...

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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	9,500 units at $24 per unit
Motorcycle helmet	6,250 units at $185 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 BudgetFor the Month Ending May 31

	Unit Sales Volume	Unit Selling Price	Total Sales
Bicycle helmet	fill in the blank e5e776085f9407a_1	$fill in the blank e5e776085f9407a_2	$fill in the blank e5e776085f9407a_3
Motorcycle helmet	fill in the blank e5e776085f9407a_4	fill in the blank e5e776085f9407a_5	fill in the blank e5e776085f9407a_6
Total revenue from sales			$fill in the blank e5e776085f9407a_7

Feedback

2. Prepare a production budget for May.

Jupiter Helmets Inc.Production BudgetFor the Month Ending May 31

	Bicycle Helmet Units	Motorcycle Helmet Units
Expected units to be sold	fill in the blank 7bbb60057fa0f94_1	fill in the blank 7bbb60057fa0f94_2
	Plus desired inventory, May 31	Plus desired inventory, May 31
Total	fill in the blank 7bbb60057fa0f94_6	fill in the blank 7bbb60057fa0f94_7
	Less estimated inventory, May 1	Less estimated inventory, May 1
Total units to be produced	fill in the blank 7bbb60057fa0f94_11	fill in the blank 7bbb60057fa0f94_12

Feedback

3. Prepare a direct materials purchases budget for May.

Jupiter Helmets Inc.Direct Materials Purchases BudgetFor the Month Ending May 31

		Direct Materials
	Plastic	Foam Lining	Total
Units required for production:
Bicycle helmet	fill in the blank 20b99a029fb4014_1	fill in the blank 20b99a029fb4014_2
Motorcycle helmet	fill in the blank 20b99a029fb4014_3	fill in the blank 20b99a029fb4014_4
	Plus desired units of inventory, May 31	Plus desired units of inventory, May 31
Total	fill in the blank 20b99a029fb4014_8	fill in the blank 20b99a029fb4014_9
	Less estimated units of inventory, May 1	Less estimated units of inventory, May 1
Total units to be purchased	fill in the blank 20b99a029fb4014_13	fill in the blank 20b99a029fb4014_14
Unit price	$fill in the blank 20b99a029fb4014_15	$fill in the blank 20b99a029fb4014_16
Total direct materials to be purchased	$fill in the blank 20b99a029fb4014_17	$fill in the blank 20b99a029fb4014_18	$fill in the blank 20b99a029fb4014_19

Feedback

4. Prepare a direct labor cost budget for May.

Jupiter Helmets Inc.Direct Labor Cost BudgetFor the Month Ending May 31

	Molding Department	Assembly Department	Total
Hours required for production:
Bicycle helmet	fill in the blank bfe82a0c7fd3ffb_1	fill in the blank bfe82a0c7fd3ffb_2
Motorcycle helmet	fill in the blank bfe82a0c7fd3ffb_3	fill in the blank bfe82a0c7fd3ffb_4
Total	fill in the blank bfe82a0c7fd3ffb_5	fill in the blank bfe82a0c7fd3ffb_6
Hourly rate	$fill in the blank bfe82a0c7fd3ffb_7	$fill in the blank bfe82a0c7fd3ffb_8
Total direct labor cost	$fill in the blank bfe82a0c7fd3ffb_9	$fill in the blank bfe82a0c7fd3ffb_10	$fill in the blank bfe82a0c7fd3ffb_11

8. Prepare a budgeted income statement for May. If required, round your interim calculations to nearest whole value.
Jupiter Helmets Inc.
Budgeted Income Statement
For the Month Ending May 31
Revenue from sales
Cost of goods sold
Gross profit
Selling and administrative expenses:
Selling expenses
Administrative expenses
Total Selling and administrative expenses
Operating income
Other revenue:
Interest revenue
Other expenses:
Interest expense
Income before income tax
Income tax expense
Net income
%24

6. Prepare a cost of goods sold budget for May. Work in process at the beginning of May is estimated to be $4,200, and work in process at the end of May is desired to be $3,800.
Jupiter Helmets Inc.
Cost of Goods Sold Budget
For the Month Ending May 31
Finished goods inventory, May 1
Work in process inventory, May 1
Direct materials:
Direct materials inventory, May 1
Direct materials purchases
Cost of direct materials available for use
Less: Direct materials inventory, May 31
Cost of direct materials placed in production
Direct labor
Factory overhead
Total manufacturing costs
Total work in process during period
Less: Work in process inventory, May 31
Cost of goods manufactured
Cost of finished goods available for sale
Less: Finished goods inventory, May 31
Cost of goods sold

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