Deleon Inc. is preparing its annual budgets for the year ending December 31, 2022. Accounting assistants furnish the data shown below. Sales budget: Anticipated volume in units Unit selling price Production budget: Desired ending finished goods units Beginning finished goods units Direct materials budget: Direct materials per unit (pounds) Desired ending direct materials pounds Beginning direct materials pounds Cost per pound Direct labor budget: Direct labor time per unit Direct labor rate per hour Budgeted income statement: Total unit cost Product JB 50 400,000 $20 30,000 25,000 2 30,000 40,000 $3 0.4 $12 $13 Product JB 60 200,000 $25 15,000 10,000 3 10,000 15,000 $4 0.6 $12 $20 An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget The latter shows selling expenses of $560,000 for product JB 50 and $360,000 for product JB 60, and administrative expenses of $540,000 for product JB 50 and $340,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 20%.
Deleon Inc. is preparing its annual budgets for the year ending December 31, 2022. Accounting assistants furnish the data shown below. Sales budget: Anticipated volume in units Unit selling price Production budget: Desired ending finished goods units Beginning finished goods units Direct materials budget: Direct materials per unit (pounds) Desired ending direct materials pounds Beginning direct materials pounds Cost per pound Direct labor budget: Direct labor time per unit Direct labor rate per hour Budgeted income statement: Total unit cost Product JB 50 400,000 $20 30,000 25,000 2 30,000 40,000 $3 0.4 $12 $13 Product JB 60 200,000 $25 15,000 10,000 3 10,000 15,000 $4 0.6 $12 $20 An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget The latter shows selling expenses of $560,000 for product JB 50 and $360,000 for product JB 60, and administrative expenses of $540,000 for product JB 50 and $340,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 20%.
Chapter8: Budgets And Bank Reconciliations
Section: Chapter Questions
Problem 3.3C
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:**Deleon Inc. Annual Budget Preparation for Year Ending December 31, 2022**
**Sales Budget:**
- **Product JB 50**
- Anticipated volume in units: 400,000
- Unit selling price: $20
- **Product JB 60**
- Anticipated volume in units: 200,000
- Unit selling price: $25
**Production Budget:**
- **Product JB 50**
- Desired ending finished goods units: 30,000
- Beginning finished goods units: 25,000
- **Product JB 60**
- Desired ending finished goods units: 15,000
- Beginning finished goods units: 10,000
**Direct Materials Budget:**
- **Product JB 50**
- Direct materials per unit (pounds): 2
- Desired ending direct materials pounds: 30,000
- Beginning direct materials pounds: 40,000
- Cost per pound: $3
- **Product JB 60**
- Direct materials per unit (pounds): 3
- Desired ending direct materials pounds: 10,000
- Beginning direct materials pounds: 15,000
- Cost per pound: $4
**Direct Labor Budget:**
- **Product JB 50**
- Direct labor time per unit: 0.4 hours
- Direct labor rate per hour: $12
- **Product JB 60**
- Direct labor time per unit: 0.6 hours
- Direct labor rate per hour: $12
**Budgeted Income Statement:**
- **Product JB 50:**
- Total unit cost: $13
- **Product JB 60:**
- Total unit cost: $20
**Additional Financial Information:**
An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. Selling expenses are $560,000 for product JB 50 and $360,000 for product JB 60. Administrative expenses are $540,000 for product JB 50 and $340,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 20%.
Transcribed Image Text:# Direct Materials Budget Preparation
## DELEON INC. Direct Materials Budget Overview
This document is designed to help prepare the direct materials budget for the year, specifically for DELEON INC. The budget is organized into two main sections for different product lines, namely JB 50 and JB 60. Each section includes a detailed breakdown for calculating the direct materials requirements and associated costs.
### Budget Components
1. **Input Fields:**
- Includes dropdown menus and input boxes where specific data can be entered related to materials, quantities, and cost calculations.
2. **Categories:**
- A series of rows, each with designated boxes, allows for categorizing different inputs required for budget computation.
3. **Calculation Areas:**
- Each section provides a space for calculations, ensuring clarity in cost estimations for JB 50 and JB 60.
### Columns Explanation
- **JB 50 and JB 60:**
- Separate columns are provided for both JB 50 and JB 60 to cater to their specific budgeting needs.
- **Final Cost Rows:**
- At the bottom, there are dedicated areas to display the final calculated costs in monetary terms (denoted by the "$" symbol).
### Objectives
- **Organization:**
- Ensures that users systematically input necessary material data and costs for accurate budget preparation.
- **Accuracy:**
- Aids in maintaining precision through clear categorization and dedicated input areas.
- **Efficiency:**
- Facilitates quick computation and easy adjustments to different material and cost variables.
### Usage
This budget template is crucial for planners in DELEON INC., allowing precise forecasting and monitoring of direct material expenses, ensuring financial oversight and strategic planning for the company’s product lines.
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