LearnCo LeamCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 20Y1, and is planning for 2012, its second year of operations, by preparing budgets from its master budget The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be. In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing a prediction of net income for 2012. You have been asked to assist the controller of LeamCo in preparing the 20Y2 budgets LearnCo Sales Budget For the Year Ending December 31, 20Y2 Product Unit Sales Volume Unit Selling Price Total Sales Basic Abacus 58.00 S288,000 36.000 36,000 Deluxe Abacus 12.00 432,000 Totals 72.000 $720,000 Direct Materials Data Table Wood Pieces Beads N Packages required per unit: Basic abacus Deluxe abacus Cost per package: Wood pieces Beads Units to be produced (from Production Budget): Basic abacus Deluxe abacus $0.30 $0.30 288.000 432.000 LearnCo For the Year Ending December 31, 2012 Direct Materials Wood Pieces Beads Total Packages required for production: Basic abacus 71.900 35.950 73,800 Deluxe abacus 110.700 Plus desired ending inventory, December 31, 2012 2,200 5,000 Total packages required 111.950 187,600 Less estimated beginning inventory, January 1 2012 3.500 4,500 Total packages to be purchased 108.450 183.100 Unit price (per package) S0.30 x $21,690 50.30 $36.620 587.465 Total direct materials to be purchased Direct Labor Data Table Gluing Assembly 0.10 0.10 0.10 0.20 Hours required per unit: Basic abacus Deluxe abacus Labor hourly rate: Gluing Assembly Units to be produced (from Production Budget): Basic abacus Deluxe abacus $11.00 $17.00 LearnCo Direct Labor Cost Budget For the Year Endina December 31, 2012 LearnCo Direct Labor Cost Budget For the Year Ending December 31, 20Y2 Gluing Assembly Total Hours required for production: Basic abacus Deluxe abacus Total hours required Hourly rate Total direct labor cost xs $266.710 LearnCo Cost of Goods Sold Budget For the Year Ending December 31, 2012 $9.870 Finished goods inventory, January 1, 2012 Work in process inventory, January 1, 20Y2 $2.010 Direct materials Direct materials inventory, January 1, 2012 S2,400 Direct materials purchases Cost of direct materials available for use 2,160 Less direct materials inventory, December 31, 2012 Cost of direct materiais placed in production Cost of Goods Sold Budget Cost of direct materials placed in productions Direct labor Factory overhead Total manufacturing costs Total work in process during period Less work in process inventory, December 31, 2012 1.250 Cost of goods manufactured Cost of finished goods available for sale Less finished goods inventory, December 31, 2012 1.500 Cost of goods sold Selling/Admin. Expenses Budget LearnCo Selling and Administrative Expenses Budget For the Year Ending December 31, 20Y2 Selling expenses: Sales salaries expense $45,000 Advertising expense 15.000 Travel expense 5.400 Total selling expenses $65.400 Administrative expenses: Officers' salaries expense $85.000 Office salaries expense 35.000 Office rent expense 26.000 Office supplies expense 6.400 Selling/Admin. Expenses Budget LearnCo Selling and Administrative Expenses Budget For the Year Ending December 31, 2012 Selling expenses: Sales salaries expense $45,000 Advertising expense 15.000 Travel expense 5,400 Total selling expenses $65.400 Administrative expenses: Officers' salaries expense $85.000 Office salaries expense 35.000 Office rent expense 26.000 Office supplies expense 6.400 elling/Admin. Expenses Budget Sales salaries expense $45,000 Advertising expense 15.000 Travel expense 5.400 $65,400 Total selling expenses Administrative expenses: Officers' salaries expense $85.000 Office salaries expense 35.000 Office rent expense 26.000 Office supplies expense 6.400 Miscellaneous administrative expenses 1.600 Total administrative expenses 154.000 Total selling and aciministrative expenses 52 19 400 Budgeted Income Statement Budgeted Income Statement Data Table Interest revenue for the year Interest expense for the year LearnCo's income tax rate $2,000 $1,500 40% Learnco Budgeted Income Statement For the Year Ending December 31, 2012 Revenue from sales Cost of goods sold Gross profit Selling and administrative expenses. * Selling expenses Administrative expenses Total selling and administrative expenses income from operations neck My Work 2 more check ok uses remaining Budgeted Income Statement Budgeted Income Statement For the Year Ending December 31, 2012 $720,000.00 Revenue from sales Cost of goods sold Gross profit Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Income from operations Other revenue and expense: Interest revenue 10 Interest expense 12 Income before income tax 13 Income tax 14 Net income Budgeted Income Statement Budgeted Income Statement For the Year Ending December 31, 20Y2 $720,000.00 Revenue from sales Cost of goods sold Gross profit Selling and administrative expenses Selling expenses Administrative expenses Total selling and administrative expenses Income from operations Other revenue and expense: 10 Interest revenue Interest expense 12 Income before income tax 13 Income tax 14 Net income