Deleon Inc. is preparing its annual budgets for the year ending December 31, 2022. Accounting assistants furnish the following data.

	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 20%.

Instructions

Prepare the following budgets for the year. Show data for each product. Quarterly budgets should not be prepared.

1. Sales.

   a. Total sales $13,000,000

2. Production.

   b. Required production units: JB 50, 405,000 JB 60, 205,000

3. Direct materials.

   c. Total cost of direct materials purchases $4,840,000

4. Direct labor.

   d. Total direct labor cost $3,420,000

5. Multiple-step income statement (Note: income taxes are not allocated to the products).

   e. Net income $1,480,000

Prepare sales and production budgets and compute cost per unit under two plans.