Problem 23-2A Deleon Inc. is preparing its annual budgets for the year ending De

Question

Problem 23-2A Deleon Inc. is preparing its annual budgets for the year ending December 31, 2017. Accounting assistants furnish the data shown below. Sales budget 403,900 201,200 $28 Unit selling price $23 Desired ending finished goods units Beginning finished goods units 26,400 32,900 16,700 12,600 Direct materials budget: Direct materials per unit (pounds) Desired ending direct materials pounds Beginning direct materials pounds Cost per pound 33,900 42,700 18,900 11,000 $3 Direct labor budget: Direct labor time per unit Direct labor rate per hour 4 $11 Budgeted income statement: Total unit cost $14 An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $665,000 for product JB 50 and $363,000 for product JB 60, and administrative expenses of $544,000 for product JB 50 and $341,000 for product JB 60, Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%

Explanation / Answer

Direct labor budget :

Budgeted Multi Step Income Statement:

JB50 JB60 Total Production required in units 397,400 205,300 Direct labour time per unit 0.4 0.6 Direct labor hours 158,960 123,180 Direct labor rate per hour $ 11 $ 11 Direct labor cost $ 1,748,560 $ 1,354,980 $ 3,103,540

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