Question

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 402,300 203,700 Unit selling price $23 $27 Production budget: Desired ending finished goods units 28,100 18,100 Beginning finished goods units 34,100 12,500 Direct materials budget: Direct materials per unit (pounds) 1 3 Desired ending direct materials pounds 34,000 18,500 Beginning direct materials pounds 44,600 13,400 Cost per pound $3 $3 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 $14 $22 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 $361,000 for product JB 60, and administrative expenses of $545,000 for product JB 50 and $344,000 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. DELEON INC. Sales Budget JB 50 JB 60 Total Expected unit sales Unit selling price $ $ Total sales $ $ $ eTextbook and Media Prepare the production budget for the year. DELEON INC. Production Budget JB 50 JB 60 : : eTextbook and Media Prepare the direct materials budget for the year. DELEON INC. Direct Materials Budget JB 50 JB 60 Total : : $ $ $ $ $ eTextbook and Media Prepare the direct labor budget for the year. (Round Direct labor time per unit answers to 1 decimal place, e.g. 52.7.) DELEON INC. Direct Labor Budget JB 50 JB 60 Total $ $ $ $ $ eTextbook and Media Prepare the budgeted multiple-step income statement for the year. (Note: income taxes are not allocated to the products). DELEON INC. Budgeted Income Statement JB 50 JB 60 Total $ $ $ $ $ $ eTextbook and Media

Answer 1

Sales budget

Product   JB 50 JB 60

Sales Units 402300 203700

Selling price/ unit $23 $27

Total Sales $9,252,900 $5,499,900

Production Budget

Product JB 50 JB 60

Desired ending finished goods 28,100 18,100

Sales budget units 402,300 203,700

Less:

Beginnig finished goods (34,100) (12,500)

Total production: 396,300 209,300      

Direct material Budget

Product JB 50 JB 60

Material per unit (pound) 1 3

Total units to produced 396,300 209,300

Material for production (pound)    396,300 627,900

Desired ending material (pound) 34,000 18,500

Less:

Beginnig material (pound)   (44,600) (13,400)

Total material to be purchased 385,700 633,000

Materal cost per pound $3 $3

Total cost for material $1,157,100 $1,899,000

Direct Labour Budget

Product JB 50 JB 60

Total units to produced 396,300 209,300

Time per unit 0.4 0.6

Total time(hour)    158,520 125,580

Rate per hour 12 12

Total labour rate $1,902,240 $1,506,960

Budgeted Income Statement

Product JB 50 JB 60

Sales units 402,300 203,700

Sales ($) (23 27) 9,252,900 5,499,900

Total cost ($) (14 22) (5,632,200) (4,481,400)

Gross profit (Sales - Total cost) 3,620,700 1,018,500

Selling expense (661,000) (361,000)

Administrative expense (545,000) (344,000)

Operating profit 2,414,700 313,500

Total opertaing profit 2,728,200 (both JB 50 & JB 60)

Interest expense (150,000)

Profit before tax 2,578,200

Tax @ 30% (773,460) (2,578,200 * 30%)

Profit 1,804,740