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 JB 50 Product JB 60 Sales budget: Anticipated volume in units 402,600 201,800 Unit selling price $23 $27 Production budget: Desired ending finished goods units 28,700 19,900 Beginning finished goods units 34,800 14,100 Direct materials budget: Direct materials per unit (pounds) 2 3 Desired ending direct materials pounds 34,800 19,900 Beginning direct materials pounds 43,300 12,700 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 $12 $22 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 $365,000 for product JB 60, and administrative expenses of $544,000 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%. Prepare a Sales budget: For the Year ending December 31, 2017 Expected Unit Sales JB50 JB60 402600 201800 X 23 X 27 _______ _______ Total 9259800 5448600 14708400 Prepare the production budget for the year. Prepare the direct materials budget for the year. Prepare the direct labor budget for the year. Prepare the budgeted multiple-step income statement for the year. (Note: income taxes are not allocated to the products). I was able to complete the Sales budget. Having issues preparing the rest of the budgets.

Explanation / Answer

Units Produced:

Direct Labour:

Budgeted Selling revenue:

Income statement

of direct material:

JB50 JB60 Units Sold 402600 201800 Less:Opening units 34800 14100 Add: Closing Units 28700 19900 Units produced (A) 396500 207600 Direct Material Required for producing 1 unit (B) 2 pounds 3 pounds Direct Material Required for production (A*B) 793000 pounds 622800 pounds Direct mAterial to be purchased: in pounds In pounds Direct material required for production 793000 622800 less: opening inventory 43300 12700 Add: Closing inventory 34800 19900 Material to be purchased 784500 630000 Cost of direct material per unit $3 $3 Total Cost of Direct Material $2353500 $1890000

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