$2.$ Urbina Inc. is preparing its annual budget for the year ending December $31,2017.$ Accounting assistants furnish the following data.

Product LN $35$ Product LN $40$

Sales budget:

Anticipated volume in units $400,000240,000$

Unit selling price $$25$ $$35$

Production budget:

Desired ending finished goods units $20,00025,000$

Beginning finished goods units $30,00015,000$

Direct materials budget:

Direct materials per unit $($pounds$)23$

Desired ending direct materials pounds $50,00010,000$

Beginning direct materials pounds $40,00020,000$

Cost per pound $$2$ $$3$

Direct labor budget:

Direct labor time per unit $0\mathrm{.}50\mathrm{.}75$

Direct labor rate per hour $$12$ $$12$

Budgeted income statement:

Total unit cost $$12$ $$22$

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $$750,000$ for product LN $35$ and $$580,000$ for product LN $40,$ and administrative expenses of $$420,000$ for product LN $35$ and $$380,000$ for product LN $40.$ Interest expense is $$110,000($not allocated to products$).$ Income taxes are expected to be $30\%.$

Instructions

Prepare the following budgets for the year. Show data for each product. You do not need to prepare quarterly budgets.

$($a$)$ Sales $($d$)$ Direct labor

$($b$)$ Production $($e$)$ Multiple$-$step Income statement $($Note: Income

$($c$)$ Direct materials taxes are not allocated to the products.$)$