Problem 21-2A (Part Level Submission) Deleon Inc. is preparing its annual budget

Question

Problem 21-2A (Part Level Submission)

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

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 production budget for the year.

DELEON INC.
Production Budget

JB 50
JB 60

402,300

203,700
:

18,500

18,100

:

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

Explanation / Answer

Production Budget For the Year Ended Dec 31, 2017 JB 50 JB 60 Total Sales In Units               402,300                203,700 Add: Closing Inventory in Units                 28,100                   18,100 Total Needs               430,400                221,800 Less: opening Inventory in Units               (34,100)                (12,500) Required Production in Units               396,300                209,300                605,600

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