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 |
402,500 |
202,500 |
| Unit selling price |
$23 |
$28 |
| Production budget: |
| Desired ending finished goods units |
30,000 |
16,000 |
| Beginning finished goods units |
33,500 |
13,800 |
| Direct materials budget: |
| Direct materials per unit (pounds) |
1 |
3 |
| Desired ending direct materials pounds |
32,700 |
18,900 |
| Beginning direct materials pounds |
43,300 |
14,200 |
| Cost per pound |
$3 |
$4 |
| Direct labor budget: |
| Direct labor time per unit |
0.3 |
0.6 |
| Direct labor rate per hour |
$12 |
$12 |
| Budgeted income statement: |
| Total unit cost |
$12 |
$21 |
An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $661,000 for product JB 50 and $363,000 for product JB 60, and administrative expenses of $545,000 for product JB 50 and $343,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.