Reference no: EM132541864

DEF Tools Inc. manufactures and sells a product called DEF Magic Wrench. In 2019 DEF plans to sell 1,000,000 units of Magic Wrench at a projected price of $50. The beginning and the target ending inventory for the product are 20,000 and 10,000, respectively. The cost of the beginning inventory for the product is $3,800,000. 0.5 kgs of direct materials are used in each wrench produced and the the cost per kg is $30. Beginning and target ending inventories for the direct materials are 50,000 kgs and 60,000 kgs respectively. The cost of the beginning direct materials inventory is $1,400,000. Each unit requires 0.25 direct labor hours to be produced and the cost of direct labor is $40/hour. Manufacturing overhead is allocated at the rate of $60 per direct manufacturing labor-hour. Selling costs are projected to be $2,000,000 and general and administrative expenses are projected to be $1,500,000. Based on the preceding projections and budget requirements for Magic Wrench, prepare the revenues budget (in dollars), production budget (in units and in dollars), direct material usage and purchases budget, direct manufacturing labor budget, budgeted finished-goods inventory at December 31, 2019 (in dollars).

Question 1: Prepare DEF Tool Inc's budgeted (proforma) income statement for 2019.