Reference no: EM132468098

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                      400,000             200,000

Unit selling price                                    $20                       $25

Production budget:

Desired ending finished goods units             30,000              15,000

Beginning finished goods units                      25,000            10,000

Direct materials budget:

Direct materials per unit (pounds)                      2                   3

Desired ending direct materials pounds             30,000           10,000

Beginning direct materials pounds                     40,000           15,000

Cost per pound                                                   $3                $4

Direct labor budget:

Direct labor time per unit                                       0.4               0.6

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 $560,000 for product JB 50 and $360,000 for product JB 60, and administrative expenses of $540,000 for product JB 50 and $340,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

Instructions

Prepare the following budgets for the year. Show data for each product. Quarterly budgets should not be prepared.

(a) Sales. (d) Direct labor.

(b) Production. (e) Multiple-step income statement (Note: income taxes are

(c) Direct materials. not allocated to the products).