Use the following information for questions 1 3:

CJ Jewelry Company makes and sells rings and necklaces, both of which require gold and silver to make. Actual sales in 2020 were 2,600 rings and 1,250 necklaces. On 12/31/2020, the finished goods inventory account contained 540 rings at a cost of $140 per ring and 220 necklaces at a cost of $224 per necklace. On 12/31/2020, the direct materials inventory account contained 4,700 grams of gold at a cost of $33 per gram and 600 ounces of silver at a cost of $21 per ounce.

CJ Jewelry Company is preparing its operating budget for the year 2021 and has provided the following information about expected activity in 2021:

Sales of rings are expected to increase by 10% and sales of necklaces are expected to decrease by 20%, as compared to the 2020 unit sales amounts

The rings are expected to sell for $350 each and the necklaces are expected to sell for $560 each

The target ending finished goods inventory (in units) for each product is expected to equal 20% of its budgeted sales for the year

Producing one ring requires 6.2 grams of gold and 0.5 ounces of silver and producing one necklace requires 9.3 grams of gold and 0.75 ounces of silver

Gold is expected to cost $30 per gram and silver is expected to cost $26 per ounce

Gross margin is expected to be 30% of budgeted revenues for the year

Selling costs are expected to include $70,000 for packaging, $45,000 for marketing, and $16.80 per unit sold for sales commissions and shipping

Administrative costs are expected to include $152,000 for salaries, $96,000 for rent, and $3.50 per unit sold for office support costs

All inventory is accounted for using FIFO

1. Prepare the production budget in units for CJ Jewelry Company for the year 2021

2. Prepare the direct materials usage budget in units and dollars for CJ Jewelry Company for the year 2021.

3. Prepare the budgeted income statement in dollars for CJ Jewelry Company for the year 2021.