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. An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $662,000 for product JB 50 and $363,000 for product JB 60, and administrative expenses of $544,000 for product JB 50 and $343,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%. Prepare the production budget for the year.

Explanation / Answer

DELEON INCE Production Budget for the year 2017 Product JB 50 Product JB 50 Units Units Units Units a) Expected Sales       402,500      201,200 b) Add: Closing Inventory          27,700        19,300 c) Gross requirement        430,200       220,500 d) Less: Opening Inventory        (31,800)       (11,100) e) Units to be produced        398,400       209,400

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