Question

Deleon Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants furnish the data shown below.

		Product JB 50		Product JB 60
Sales budget:
Anticipated volume in units		403,700		203,300
Unit selling price		$23		$28
Production budget:
Desired ending finished goods units		27,900		19,300
Beginning finished goods units		31,600		12,600
Direct materials budget:
Direct materials per unit (pounds)		2		3
Desired ending direct materials pounds		33,600		16,700
Beginning direct materials pounds		43,200		14,800
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		$14		$22

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 $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%.

Prepare the production budget for the year.

Prepare the direct materials budget for the year.

JB 50		JB 60		Total
		enter a number of units		enter a number of units
		enter the amount of pounds		enter the amount of pounds
		enter a total amount of pounds for the first part		enter a total amount of pounds for the first part
		enter the amount of pounds		enter the amount of pounds
		enter a total amount of pounds for the second part		enter a total amount of pounds for the second part
		enter the amount of pounds		enter the amount of pounds
		enter a total amount of pounds for the third part		enter a total amount of pounds for the third part
		$enter a dollar amount		$enter a dollar amount
		$enter a total dollar amount		$enter a total dollar amount		$enter a total dollar amount

Prepare the direct labor budget for the year. (Round Direct labor time per unit answers to 1 decimal place, e.g. 52.5.)

JB 50		JB 60		Total

Prepare the budegeted multiple-step income statement for the year. (Note: income taxes are not allocated to the products).

DELEON INC. Budgeted Income Statement choose the accounting period                                                                      December 31, 2020For the Year Ending December 31, 2020For the Quarter Ending December 31, 2020
Select One		JB 50		JB 60		Total
		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
		enter a dollar amount		enter a dollar amount		enter a dollar amount
		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part
		enter a dollar amount		enter a dollar amount		enter a dollar amount
		enter a dollar amount		enter a dollar amount		enter a dollar amount
		enter a total amount for section two		enter a total amount for section two		enter a total amount for section two
		$enter a total amount for the second part		$enter a total amount for the second part		enter a total amount for the second part
						enter a dollar amount
						enter a total amount for the third part
						enter a dollar amount
						$enter a total net income or loss amount

Prepare the budegeted multiple-step income statement for the year. (Note: income taxes are not allocated to the products).

	JB 50		JB 60		Total
		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
		enter a dollar amount		enter a dollar amount		enter a dollar amount
		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part
		enter a dollar amount		enter a dollar amount		enter a dollar amount
		enter a dollar amount		enter a dollar amount		enter a dollar amount
		enter a total amount for section two		enter a total amount for section two		enter a total amount for section two
		$enter a total amount for the second part		$enter a total amount for the second part		enter a total amount for the second part
						enter a dollar amount
						enter a total amount for the third part
						enter a dollar amount
						$enter a total net income or loss amount

Answer 1

Solution

Deleon Inc

Sales budget –

Deleon Inc Sales Budget for the Year Ending December 31, 2020 JB 50 JB 60 Total Anticipated unit sales unit selling price Total Sales 403,700 $23 $9,285,100 203,300 $28 $5,692,400 $14,977,500

Note – total sales = anticipated sales in units x unit selling price

Production Budget –

Deleon Inc Production Budget for the Year Ending December 31, 2020 JB 50 JB 60 403,700 203,300 Expected unit sales Add: desired ending finished goods in units Total requirement Less: beginning finished goods inventory Production units 27,900 431,600 19,300 222,600 31,600 400,000 12,600 210,000

3. Direct Materials Budget –

Deleon Inc Direct Materials Budget for the Year Ending December 31, 2020 JB 50 JB 60 Total 400,000 210,000 Production units Direct materials per unit (pounds) Total production needs Add: desired ending inventory Total direct material needed Less: beg. Direct materials Direct materials needed for production Direct materials cost per pound Total direct materials purchases 2 800,000 33,600 833,600 43,200 3 630,000 16,700 646,700 14,800 790,400 $3 $2,371,200 631,900 $4 $2,527,600 $4,898,800

4. Direct labor budget -

Deleon Inc Direct Labor Budget for the Year Ending December 31, 2020 JB 50 JB 60 400,000 210,000 0.30 0.60 Production requirement Direct labor time per unit Total direct labor hours needed Direct labor rate per hour Total direct labor cost 120,000 $12 $1,440,000 126,000 $12 $1,512,000

5. Budgeted income statement -

Deleon Inc Budgeted Income Statement For the year ended December 31, 2020 JB 50 JB 60 Total $9,285,100 $5,692,400 $14,977,500 $5,651,800 $4,472,600 $10,124,400 $3,633,300 $1,219,800 $4,853,100 $662,000 $543,000 $365,000 $342,000 $1,027,000 $885,000 Sales Cost of goods sold Gross profit Operating Expenses: Selling expenses Admin. Expenses Total operating expenses Income before income taxes Income tax expense at 30% Net Income $1,205,000 $707,000 $1,912,000 $2,428,300 $512,800 $2,941,100 $882,330 $2,058,770

Computations –

Cost of goods sold –

JB 50 = 403,700 x $14 = $5,651,800

JB 60 = 203,300 x $22 = $4,472,600