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 $661,000 for product JB 50 and $365,000 for product JB 60, and administrative expenses of $543,000 for product JB 50 and $342,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

Product
JB 50

Product
JB 60

Sales budget:     Anticipated volume in units 402,800 203,900     Unit selling price $23 $28 Production budget:     Desired ending finished goods units 27,800 19,000     Beginning finished goods units 34,900 13,600 Direct materials budget:     Direct materials per unit (pounds) 2 3     Desired ending direct materials pounds 32,100 18,500     Beginning direct materials pounds 43,000 14,600     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 $14 $21 CALCULATOR | FULL SCREEN I PRINTER VERSION Problem 9-2A (Part Level Submission) Deleon Inc. is preparing its annual budgets for . BAC the year ending December 31, 2017. Accounting assistants furnish the data shown below. December 31, 2017 Product Product B 50 JB 60 Sales budget: Anticipated volume in units Unit selling price 402,800 203,900 $23 $28 Production budget: Desired ending finished goods units Beginning finished goods units 27,800 19,000 34,900 13,600 Direct materials budget: Direct materials per unit (pounds) Desired ending direct materials pounds Beginning direct materials pounds Cost per pound 32,100 18,500 43,00014,600 53 $3 Direct labor budget: Direct labor time per unit Direct labor rate per hour 0.4 0.6 $12 $12 Budgeted income statement: Total unit cost $14 $21 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 38 50 and $365,000 for product 18 60, and administrative expenses of $543,000 for product JB 50 and $342,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%. SonsIn All Rights Recerved. A Division of 2shn Wley.&Sans; Ins e:

Explanation / Answer

Deleon Inc.

Direct Labour budget

JB 50

JB 60

Anticipated volume of sales in units

402800

203900

Add: Desired ending finished good units

27800

19000

430600

222900

Less: Opening finished good units

34900

13600

Anticipated production (Units)

395700

209300

Direct labour time per unit

0.4

0.6

Direct labour hours required for production (Hours)

(395700 x 0.4 hours)

158280 hours

(209300 x 0.6 hours)

125580 hours

Direct labour per hour cost ($)

12

12

Direct labour cost for production ($)

(158280 x 12)        

1899360

(125580 x 12)

1506960

Deleon Inc.

Direct Labour budget

JB 50

JB 60

Anticipated volume of sales in units

402800

203900

Add: Desired ending finished good units

27800

19000

430600

222900

Less: Opening finished good units

34900

13600

Anticipated production (Units)

395700

209300

Direct labour time per unit

0.4

0.6

Direct labour hours required for production (Hours)

(395700 x 0.4 hours)

158280 hours

(209300 x 0.6 hours)

125580 hours

Direct labour per hour cost ($)

12

12

Direct labour cost for production ($)

(158280 x 12)        

1899360

(125580 x 12)

1506960

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