Deleon Inc. is preparing its annual budgets for the year ending December 31, 2017. Accounting assistants furnish the data shown below.

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $560,000 for product JB 50 and $360,000 for product JB 60, and administrative expenses of $540,000 for product JB 50 and $340,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.
(a) Total sales $13,000,000
(b) Required production units: JB 50, 405,000 JB 60, 205,000
(c) Total cost of direct materials purchases $4,840,000
(d) Total direct labor cost $3,420,000
(e) Net income $1,295,000
Instructions
Prepare the following budgets for the year. Show data for each product. Quarterly budgets should not be prepared.
(a) Sales.
(b) Production.
(c) Direct materials.
(d) Direct labor.
(e) Multiple-step income statement (Note: income taxes are not allocated to the products).
Prepare sales and production budgets and compute cost per unit under two plans.

Product JB 50 Product JB 6o Sales budget: Anticipated volume in units Unit selling price 400,000 200,0O0 $20 $25 Production budget: Desired ending finished goods units Beginning finished goods units 30,000 15,000 25,000 10,000 Direct materials budget: Direct materials per unit (pounds) Desired ending direct materials pound:s Beginning direct materials pounds Cost per pound 2 30,000 40,000 $3 3 10,000 15,000 $4 Direct labor budget Direct labor time per unit Direct labor rate per hour 0.4 0.6 12 $12 Budgeted income statement: Total unit cost $13 $20