Question

Problem 9-2A (Part Level Submission)

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		402,600		202,200
Unit selling price		$22		$28
Production budget:
Desired ending finished goods units		28,100		20,000
Beginning finished goods units		32,500		11,100
Direct materials budget:
Direct materials per unit (pounds)		2		3
Desired ending direct materials pounds		31,200		17,000
Beginning direct materials pounds		43,900		11,400
Cost per pound		$2		$3
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		$13		$21

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $663,900 for product JB 50 and $364,400 for product JB 60, and administrative expenses of $543,300 for product JB 50 and $343,200 for product JB 60. Income taxes are expected to be 30%.

DELEON INC.
Budgeted Income Statement
For the Year Ending December 31,2014

Vocabulary options to fill in missing title: Administrative ExpensesBeginning InventoryCost of Goods SoldEnding InventoryGross ProfitIncome before Income TaxesIncome from OperationsIncome Tax ExpenseNet Income/ (Loss)Operating ExpensesPurchasesSalesSelling ExpensesTotal Operating Expenses

JB 50 JB 60 Total

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Answer 1

DELEON INC.
Budgeted Income Statement
For the Year Ending December 31, 2014
	JB 50	JB 60	Total
Sales revenue	$        8,857,200	$        5,661,600	$ 14,518,800
Less: Cost of Goods sold	$        5,233,800	$        4,246,200	$    9,480,000
Gross Profit	$        3,623,400	$        1,415,400	$    5,038,800
Less: Operating Expenses
Selling Expenses	$            663,900	$            364,400	$    1,028,300
Administrative Expenses	$            543,300	$            343,200	$        886,500
Total Operating Expenses	$        1,207,200	$            707,600	$    1,914,800
Income from Operations	$        2,416,200	$            707,800	$    3,124,000
Less: Other Expense (Income) (Like Interest expense, Interest revenue, Gain on sale of equipment, etc.)			$                   -
Income before Income Taxes			$    3,124,000
Less: Income Tax @ 30% (Income before tax * 30%)			$        937,200
Net income			$    2,186,800

	JB 50	JB 60
Anticipated volume in units Sold	402,600	202,200
Multiply: Unit selling price	$                      22	$                      28
Sales revenue	$        8,857,200	$        5,661,600
Anticipated volume in units Sold	402,600	202,200
Multiply: Total unit cost	$                      13	$                      21
Sales revenue	$        5,233,800	$        4,246,200