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, 2017. Accounting assistants furnish the data shown below. Product Product JB 5035 60- Sales budget Anticipated volume in units Unit selling price 404,400 201,000 $27 $22 Production budget Desired ending finished goods units Beginning finished goods units 28,800 34,100 17,600 13,100 Direct materials budget Direct materials per unit (pounds) Desired ending direct materials pounds Beginning direct materials pounds Cost per pound 34,600 41,100 $2 16,400 13,000 $4 Direct labor budget: Direct labor time per unit Direct labor rate per hour 0.3 $10 0.6 $10 Budgeted income statement Total unit cost $13 $22 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 $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 tobe 30%.

Explanation / Answer

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Sales Budget JB50 JB60 Total Expected Unit Sales                404,400                201,000 Unit Selling price                           22                           27 Total Sales            8,896,800            5,427,000    14,323,800

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