Deleon Inc. is preparing its annual budgets for the year ending December 31, 201

Question

Deleon Inc. is preparing its annual budgets for the year ending December 31, 2014. Accounting assistants furnish the data shown below.

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $663,000 for product JB 50 and $364,500 for product JB 60, and administrative expenses of $542,100 for product JB 50 and $341,900 for product JB 60. Income taxes are expected to be 30%.

A) Sales

B) Prodcution

C) Direct Materials

D) Direct Labor

E) Income Statement ( Note: Income taxes are not allocated to the products)

Product
JB 50 Product
JB 60 Sales budget: Anticipated volume in units 401,900 203,400 Unit selling price $23 $27 Production budget: Desired ending finished goods units 29,100 19,200 Beginning finished goods units 32,500 11,200 Direct materials budget: Direct materials per unit (pounds) 1 3 Desired ending direct materials pounds 33,600 19,000 Beginning direct materials pounds 44,400 13,600 Cost per pound $2 $4 Direct labor budget: Direct labor time per unit 0.3 0.6 Direct labor rate per hour $11 $11 Budgeted income statement: Total unit cost $12 $21

Explanation / Answer

answer

C) Direct Materials

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