Question

In: Accounting

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

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 402,100 204,400
    Unit selling price $23 $27
Production budget:
    Desired ending finished goods units 29,900 18,100
    Beginning finished goods units 33,300 14,600
Direct materials budget:
    Direct materials per unit (pounds) 1 2
    Desired ending direct materials pounds 31,100 16,700
    Beginning direct materials pounds 42,500 12,000
    Cost per pound $2 $4
Direct labor budget:
    Direct labor time per unit 0.3 0.6
    Direct labor rate per hour $12 $12
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 $664,000 for product JB 50 and $365,000 for product JB 60, and administrative expenses of $545,000 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%

Complete a Budgeted Income Statement

Solutions

Expert Solution

BUDGETED INCOME STATEMENT

sales $92,48,300 $55,18,800 $1,47,67,100
closing stock
direct material $62,200 $66,800 $1,29,000
finished goods $6,87,700 $4,88,700 $11,76,400
Total Income $99,98,200 $60,74,300 $1,60,72,500
opening stock
direct material $85,000 $48,000 $1,33,000
finished goods $7,65,900 $3,94,200 $11,60,100
purchase od direct material(Notes) $7,74,600 $16,82,000 $24,56,600
Labour Cost $14,35,320 $14,96,880 $29,32,200
Unit cost $51,83,100 $43,65,900 $95,49,000
selling expenses $6,64,000 $3,65,000 $10,29,000
administative expenses $5,45,000 $3,45,000 $8,90,000
interest Expenes 150000
Total Expenes $78,27,420 $65,72,780 $1,45,50,200
Profit Before Tax $15,22,300
Tax @ 30% $4,56,690
Budgeted Profit after Tax $10,65,610

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