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

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $664,000 for product JB 50 and $365,000 for product JB 60, and administrative expenses of $545,000 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 the budgeted multi-step income statement for the year. (income taxes are not allocated to the products)

Product
JB 50

Product
JB 60

Sales budget:     Anticipated volume in units 402,100 204,400     Unit selling price $23 $27 Production budget:     Desired ending finished goods units 29,900 18,100     Beginning finished goods units 33,300 14,600 Direct materials budget:     Direct materials per unit (pounds) 1 2     Desired ending direct materials pounds 31,100 16,700     Beginning direct materials pounds 42,500 12,000     Cost per pound $2 $4 Direct labor budget:     Direct labor time per unit 0.3 0.6     Direct labor rate per hour $12 $12 Budgeted income statement:     Total unit cost $13 $21

Explanation / Answer

Budgeted Multi-step Income Statement JB50 JB60 Total Revenue Sales Revenue 9248300 5518800 14767100 Less: Cost of Good Sold 5227300 4292400 9519700 Gross Profit 4021000 1226400 5247400 Operating expenses Less Selling Expeenses 664000 365000 Administrative Expenses 545000 1209000 345000 710000 1919000 Product Operating Income 2812000 516400 3328400 Other Income/ (Loss)/Expenses Interest Expense -150000 Net Other Income and Expenses -150000 Income Before taxes 3178400 Income tax (30%) 953520 Net Income 2224880 working JB50 JB 60 Cost of good sold 5227300 4292400 402100*13 204400*21 Sales 9248300 5518800 402100*23 204400*27

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