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 $664,600 for product JB 50 and $363,600 for product JB 60, and administrative expenses of $541,300 for product JB 50 and $344,100 for product JB 60. Income taxes are expected to be 30%.

I need help with the red boxes please!! Thank you!

Explanation / Answer

Amount in $)
Direct Labour Budget JB50 JB 60 Total
Units to be produced (a) 399100   206700     
Diirect labour time per unit (b) 0.3 0.6     
Total required Direct Labour Hours [c= (a/b)] 1330333   344500     
Direct Labour Cost per hour (d) 11   11     
Direct Labour c*d 14633667   3789500   18423166.67
            
Budgeted Income Statement           
Sales 8463000   5429700   13892700
Cost of goods sold 3022500   3418700   6441200
Gross profit 5440500   2011000   7451500
Operating expense           
Administrative expense 541300   344100   885400
Selling Expense 664600   363600   1028200
Total operating expense 1205900   707700   1913600
Income Before taxes 4234600   1303300   5537900
Tax Expense 1661370
Net Income 3876530
            
Direct Materials Budget Total
Unit to be produced 403000   201100     
Direct Material per unit 1 2     
Total pound needed for production 403000   402200     
Add: Desired ending direct material 32200   18900     
Total material required 435200   421100     
less: beginning direct Material 45000   13500     
Direct Material purchase 390200   407600     
Cost per pound 2 3     
Total cost of Direct Material purchases 780400   1222800   2003200

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