Problem 21-2A

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		403,400		201,800
Unit selling price		$22		$27
Production budget:
Desired ending finished goods units		27,500		17,200
Beginning finished goods units		32,800		13,800
Direct materials budget:
Direct materials per unit (pounds)		2		3
Desired ending direct materials pounds		31,100		17,800
Beginning direct materials pounds		42,600		12,000
Cost per pound		$2		$3
Direct labor budget:
Direct labor time per unit		0.3		0.6
Direct labor rate per hour		$10		$10
Budgeted income statement:
Total unit cost		$13		$22

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $662,000 for product JB 50 and $361,000 for product JB 60, and administrative expenses of $541,000 for product JB 50 and $345,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

Prepare the production budget for the year. Prepare the Direct Materials budget for the year. Prepare the Direct Labor budget for the year. Prepare the budgeted multiple-step income statement for the year. (Note: income taxes are not allocated to the products).

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