Managerial Accounting: P23-2A Deleon Inc. is preparing its annual budgets

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Managerial Accounting
Problem 23-2A
Deleon Inc. is preparing its annual budgets for the year ending December 31, 2014. Accounting assistants furnish the data shown below.
Product JB 50 Product JB 60
Sales budget:
Anticipated volume in units 400,000 200,000
Unit selling price $20.00 $25.00
Production budget:
Desired ending finished goods units 30,000 15,000
Beginning finished goods units 25,000 10,000
Direct materials budget:
Direct materials per unit (pounds) 2 3
Desired ending direct materials pounds 30,000 10,000
Beginning direct materials pounds 40,000 15,000
Cost per pound $3.00 $4.00
Direct labor budget:
Direct labor time per unit 0.40 0.60
Direct labor rate per hour $12.00 $12.00
Budgeted income statement:
Total unit cost $13.00 $20.00

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $560,000 for product JB 50 and $360,000 for product JB 60, and administrative expenses of $540,000 for product JB 50 and $340,000 for product JB 60. Interest expense is $150,00 (not allocated to products). Income taxes are expected to be 30%.

Prepare the following budgets for the year. Show data for each product. Quarter budgets should not be prepared.
a. Sales
b. Production
c. Direct materials
d. Direct labor
e. Multiple-step income statement (Note: Income taxes are not allocated to the products.)
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