Mangerial Acct Question.. Deleon Inc. is preparing its annual budgets for the ye

Question

Mangerial Acct Question.. Deleon Inc. is preparing its annual budgets for the year ending December 31, 2013. Accounting assistants furnish the data shown below. Product JB 50 Product JB 60 Sales budget: Anticipated volume in units 403,100 202,400 Unit selling price $22 $27 Production budget: Desired ending finished goods units 26,200 18,600 Beginning finished goods units 32,300 14,800 Direct materials budget: Direct materials per unit (pounds) 2 2 Desired ending direct materials pounds 34,800 19,400 Beginning direct materials pounds 45,000 12,900 Cost per pound $2 $4 Direct labor budget: Direct labor time per unit 0.3 0.5 Direct labor rate per hour $11 $11 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 $663,900 for product JB 50 and $362,500 for product JB 60, and administrative expenses of $542,300 for product JB 50 and $343,400 for product JB 60. Income taxes are expected to be 30%. Complete the following budgets for the year. (List operating expenses from largest to smallest amount, e.g. 10, 5, 2.) (a) Sales (d) Direct labor (b) Production (e) Income statement (Note: Income taxes are not allocated to the products.) (c) Direct materials

Explanation / Answer

Sales Budget JB 50 JB 60 Budgeted Sales               403,100               202,400 Unit Selling price                          22                          27 Sales in $            8,868,200            5,464,800 Production Budget JB 50 JB 60 Budgeted Sales (In Units)               403,100               202,400 Add: Ending Finished Stock (in Units)                  26,200                  18,600 Total needs (In Units)               429,300               221,000 Less: Opening Stock (In Units)               (32,300)               (14,800) Required Production (In Units)               397,000               206,200 Direct Materials Budget JB 50 JB 60 Required Production (In Units)               397,000               206,200 Direct Materials per Unit (in pounds)                            2                            2 Material Required (in pounds)               794,000               412,400 Add: Closing Inventory (in pounds)                  34,800                  19,400 Total needs (in pounds)               828,800               431,800 Less: Opening Inventory (in pounds)               (45,000)               (12,900) Required Purchases (in pounds)               783,800               418,900 Cost per pound                            2                            4 Total Direct Material Cost - Purchases            1,567,600            1,675,600 Direct Labor Budget JB 50 JB 60 Required Production (in Units)               397,000               206,200 DLH per Unit                      0.30                      0.50 Total DLH               119,100               103,100 DLR per hr                          11                          11 Total Direct Labour Cost            1,310,100            1,134,100 Income Statement JB 50 JB 60 Sales In Units               403,100               202,400 Sales in $            8,868,200            5,464,800 Less: Cost of goods Sold JB 50 - $12 X 403100 Units         (4,837,200) JB 60 - $22 X 202400 Units         (4,452,800) Less: Selling Expenses             (663,900)             (362,500) Less: Admn. Exp.             (542,300)             (343,400) Operating Income / (Loss)            2,824,800               306,100 Less: Income Tax (30%)             (847,440)               (91,830) Net Income            1,977,360               214,270

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