Deleon Inc. is preparing its annual budgets for the year ending December 31, 2017.

Accounting assistants furnish the data shown below.

Product JB 50 Product JB 60

Sales budget:

Anticipated volume in units 400,000 200,000

Unit selling price $20 $25

Production budget:

Desired ending finished goods units 30,000 15,000

Beginning finished goods units 25,000 10,000

Direct materials budget:

Direct materials per unit (pounds) 2 3

Desired ending direct materials pounds 30,000 10,000

Beginning direct materials pounds 40,000 15,000

Cost per pound $3 $4

Direct labor budget:

Direct labor time per unit 0.4 0.6

Direct labor rate per hour $12 $12

Budgeted income statement:

Total unit cost $13 $20

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%.

Instructions

Prepare the following budgets for the year. Show data for each product. Quarterly budgets

should not be prepared.

(a) Sales. (d) Direct labor.

(b) Production. (e) Multiple-step income statement (Note: income taxes are

(c) Direct materials. not allocated to the products).