Question

Need help with the last part

Problem 21-2A (Part Level Submission) Deleon Inc. is preparing its annual budgets for the year ending December 31, 2017. Accounting assistants furnish the data shown below. Product Product JB 60 JB 50 Sales budget: Anticipated volume in units 402,500 202,500 Unit selling price $23 $28 Production budget: 16,000 Desired ending finished goods units 30,000 Beginning finished goods units 33,500 13,800 Direct materials budget: Direct materials per unit (pounds) 1 3 Desired ending direct materials pounds 32,700 18,900 Beginning direct materials pounds 14,200 43,300 Cost per pound $3 $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 $12 $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 JB 50 and $363,000 for product JB 60, and administrative expenses of $545,000 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%

Answer 1

Solution :

Budgeted Income Statement - Deleon Inc. For the year ended Dec 31, 2017
Particulars	JB50	JB60	Total
Sales Revenue	$9,257,500.00	$5,670,000.00	$14,927,500.00
Cost of goods sold JB 50 - 402500*$12 JB 60 - 202500*$21	$4,830,000.00	$4,252,500.00	$9,082,500.00
Gross Profit	$4,427,500.00	$1,417,500.00	$5,845,000.00
Operating Expenses:
Selling Expenses	$661,000.00	$363,000.00	$1,024,000.00
Administrative expenses	$545,000.00	$343,000.00	$888,000.00
Total Operating expenses	$1,206,000.00	$706,000.00	$1,912,000.00
Operating Income	$3,221,500.00	$711,500.00	$3,933,000.00
Interest expense			$150,000.00
Income before taxes			$3,783,000.00
Income tax expense (30%)			$1,134,900.00
Net Income			$2,648,100.00