$2 Problem 1: (4ps) ABC Inc. is preparing its annual budgets for the year ending December 31, 2021. Accounting assistants furnish the following data. Product Product LN 35 LN 40 Sales budget: Anticipated volume in units 400,000 240,000 Unit selling price $25 $35 Production budget: Desired ending finished goods units 30,000 25,000 Beginning finished goods units 20,000 15,000 Direct materials budget: Direct materials per unit (pounds) 2 3 Desired ending direct materials pounds 50,000 20,000 Beginning direct materials pounds 40,000 10,000 Cost per pound $3 Direct labor budget: Direct labor time per unit 0.5 0.75 Direct labor rate per hour $12 $12 Budgeted income statement: Total unit cost $11 $20 An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $750,000 for product LN 35 and $590,000 for product LN 40, and administrative expenses of $420,000 for product LN 35 and $380,000 for product LN 40. Income taxes are expected to be 30%. Instructions Prepare the following budgets of LN35 ONLY for the year. Show data for each product. You do not need to prepare quarterly budgets. (a) Sales (b) Production (c) Direct materials (d) Direct labor (e) Income statement