Urbina Inc. is preparing its annual budgets for the year ending December 31, 2012. Accounting assistants furnish the following data.

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $750,000 for product LN 35 and $590,000 for product LN 40, and administrative expenses of $420,000 for product LN 35 and $380,000 for product LN 40. Income taxes are expected to be 30%.

Instructions
Prepare the following budgets for the year. Show data for each product. You do not need to prepare quarterly budgets.
(a) Sales
(b) Production
(c) Direct materials
(d) Direct labor
(e) Income statement (Note: Income taxes are not allocated to theproducts.)

Transcribed Image Text:

Product LN 35 Product LN 40 Anticipated volume in units Unit selling price 400,000 $25 240,000 $35 Production budget Desired ending finished goods units Beginning finished goods units 30,000 20,000 25,000 15,000 Direct materials budget: Direct materials per unit (pounds) Desired ending direct materials pounds Beginning direct materials pounds 50,000 40,000 20,000 10,000 Direct labor time per unit Direct labor rate per hour 0.75 $12 $12 Budgeted income statement: Total unit cost $11 $20