Solution-Discuss the selling and administrative expense

Discuss the selling and administrative expense budget

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Reference no: EM131795772

Deleon Inc. is preparing its annual budgets for the year ending December 31, 2017. Accounting assistants furnish the data shown below.

Product JB 50	Product JB 60
Sales budget:
Anticipated volume in units	402,500	202,500
Unit selling price	$23	$28
Production budget:
Desired ending finished goods units	30,000	16,000
Beginning finished goods units	33,500	13,800
Direct materials budget:
Direct materials per unit (pounds)	1	3
Desired ending direct materials pounds	32,700	18,900
Beginning direct materials pounds	43,300	14,200
Cost per pound	$3	$4
Direct labor budget:
Direct labor time per unit	0.3	0.6
Direct labor rate per hour	$12	$12
Budgeted income statement:
Total unit cost	$12	$21

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $661,000 for product JB 50 and $363,000 for product JB 60, and administrative expenses of $545,000 for product JB 50 and $343,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

Reference no: EM131795772

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Discuss the selling and administrative expense budget

Reference no: EM131795772

Reference no: EM131795772

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