Prepare the budgeted multiple-step income statement

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Question - Cullumber Inc. is preparing its annual budgets for the year ending December 31, 2022. Accounting assistants furnish the following.

 

Product JB 50

Product JB 60

Sales budget:

 

 

Anticipated volume in units

336,000

168,000

Unit selling price

$20

$25

Production budget:

 

 

Desired ending finished goods units

25,200

12,600

Beginning finished goods units

21,000

8,400

Direct materials budget:

 

 

Direct materials per unit (pounds)

2

3

Desired ending direct materials pounds

25,200

8,400

Beginning direct materials pounds

33,600

12,600

Cost per pound

$3

$4

Direct labor budget:

 

 

Direct labor time per unit

0.40

0.60

Direct labor rate per hour

$12

$12

Budgeted income statement:

 

 

Total unit cost

$13

$20

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $470,400 for product JB 50 and $302,400 for product JB 60, and administrative expenses of $453,600 for product JB 50 and $285,600 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 20%.

Required -

(a) Prepare the sales budget for the year.

(b) Prepare the production budget for the year.

(c) Prepare the direct materials budget for the year.

(d) Prepare the direct labor budget for the year.

(e) Prepare the budgeted multiple-step income statement for the year. (Note: income taxes are not allocated to the products).

Reference no: EM133090987

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