Question

please solve neatly and clearly. thank you

Delcon Inc is preparing it annual budget for 2019. It sells two products as below. The CEO has requested the sales director, production manager & the accounting staff to prepare the budgets - INFORMATION AVAILABLE: Product JB 50 Units S 400,000 $20.00 Product JB 60 Units 20,000 $25.00 2lbs $3.00 3165 $4.00 SALES BUDGET Direct Material per Unit Cost Per Pound Direct Labor Time per unit (as per hour) Direct Labor Rate per hour 0.4 0.6 $12.00 $12.00 Variable Overhead - per unit $2.20 $2.20 1) DETERMINE THE COST PER UNIT Unit Cost Product JB 50 Product B 60 DM Variable Overhead Total 2) Production Budget: DETERMINE THE NUMBER OF UNITS OF EACH PRODUCT TO BE PRODUCED Budget Sales Units + Desired Finish Inventory - Beginning Inventory Required production Units IN UNITS JB 50 JB 60

Answer 1

1	DETERMINATION OF UNIT COST
			PRODUCT JB 50		PRODUCT JB 60
		DM	6		12
			`2LBS*3		`3LBS*4
		DLC	4.8		7.2
			`12*0.4		`12*0.6
		VARIABLE OHS	2.2		2.2
		TOTAL	13		21.4
2	NO OF UNITS TO BE SOLD
				SALES UNITS		DESIRED FG		BEGINNING INVENTORY
		PRODUCT JB 50		400000		0		0		400000
		PRODUCT JB 60		20000		0		0		20000
				NO DATA ON OPENING AND DESIRED FG IS GIVEN IN THE QUESTION SO CONSIDERING IT AS 0
		3.DETERMINE THE COST OF GOODS SOLD
				JB 50		JB 60
			BEGINNING	0		0
				`0*13		`0*20
			PRODUCTION	5200000		428000
				`13*400000		`21.4*20000
			GOODS AVAILABLE	5200000		428000
			ENDING INVENTORY	0		0
				5200000		428000
	4. MASTER BUDGET
			JB 50		JB 60		TOTAL
		SALES	8000000		500000		8500000
			`20*400000		`25*20000
		COGS	5200000		428000		5628000
			`13*400000		`21.4*20000
		%	0.65		0.856
		SELLING AND	50000		5000		55000
		ADMIN EXPENSES	200000		50000		250000
			2550000		17000		2567000
		INCOME TAX	765000		5100		770100
			1785000		11900