Question

Deleon Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants furnish the data shown below.

		Product JB 50		Product JB 60
Sales budget:
Anticipated volume in units		401,600		203,100
Unit selling price		$21		$27
Production budget:
Desired ending finished goods units		27,100		17,000
Beginning finished goods units		31,100		13,300
Direct materials budget:
Direct materials per unit (pounds)		2		3
Desired ending direct materials pounds		33,300		17,600
Beginning direct materials pounds		41,800		12,000
Cost per pound		$3		$3
Direct labor budget:
Direct labor time per unit		0.4		0.6
Direct labor rate per hour		$11		$11
Budgeted income statement:
Total unit cost		$13		$21

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $662,000 for product JB 50 and $365,000 for product JB 60, and administrative expenses of $544,000 for product JB 50 and $345,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $662,000 for product JB 50 and $365,000 for product JB 60, and administrative expenses of $544,000 for product JB 50 and $345,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

Prepare the sales budget for the year.

Prepare the production budget for the year.

Prepare the direct materials budget for the year.

Answer 1

Solution 1:

Sales Budget - Deleon Inc.
Particulars	JB50	JB60	Total
Expected unit sales	401600	203100
Selling price per unit	$21.00	$27.00
Projected Sales Revenue	$8,433,600.00	$5,483,700.00	$13,917,300.00

Solution 2:

Production Budget - Deleon Inc.
Particulars	JB50	JB60
Expected unit sales	401600	203100
Add: Desired ending inventory	27100	17000
Total required units	428700	220100
Less: Beginning Inventory	31100	13300
Budgeted production units	397600	206800

Solution 3:

Material Purchase Budget - Deleon Inc.
Particulars	JB50	JB60	Total
Budgeted production units	397600	206800
Material required per unit (In pound)	2	3
Total material requirement	795200	620400
Add: Desired units of material in ending inventory	33300	17600
Total material required	828500	638000
Less: units of material in beginning inventory	41800	12000
Budgeted purchase of raw material (In pound)	786700	626000
Cost per pound	$3.00	$3.00
Budgeted purchase of raw material	$2,360,100.00	$1,878,000.00	$4,238,100.00