| 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 |
|
401,300 |
|
|
200,000 |
|
| Unit selling price |
|
$18.00 |
|
|
$23.00 |
|
| Production budget: |
|
|
|
|
|
|
| Desired ending finished goods units |
|
26,300 |
|
|
16,700 |
|
| Beginning finished goods units |
|
34,900 |
|
|
12,500 |
|
| Direct materials budget: |
|
|
|
|
|
|
| Direct materials per unit (pounds) |
|
3 |
|
|
4 |
|
| Desired ending direct materials pounds |
|
27,800 |
|
|
18,000 |
|
| Beginning direct materials pounds |
|
39,300 |
|
|
12,500 |
|
| Cost per pound |
|
$2 |
|
|
$3 |
|
| Direct labor budget: |
|
|
|
|
|
|
| Direct labor time per unit |
|
0.3 |
|
|
0.6 |
|
| Direct labor rate per hour |
|
$10 |
|
|
$10 |
|
| Budgeted income statement: |
|
|
|
|
|
|
| Total unit cost |
|
$10 |
|
|
$19 |
|
An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $657,400 for product JB 50 and $356,900 for product JB 60, and administrative expenses of $535,100 for product JB 50 and $335,700 for product JB 60. Income taxes are expected to be 20%.
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