Answered: Prepare the direct labor budget for the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Deleon Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants furnish the data shown below.

	Product JB 50	Product JB 60
Sales budget:
Anticipated volume in units	400,000	200,000
Unit selling price	$20	$25
Production budget:
Desired ending finished goods units	30,000	15,000
Beginning finished goods units	25,000	10,000
Direct materials budget:
Direct materials per unit (pounds)	2	3
Desired ending direct materials pounds	30,000	10,000
Beginning direct materials pounds	40,000	15,000
Cost per pound	$3	$4
Direct labor budget:
Direct labor time per unit	0.4	0.6
Direct labor rate per hour	$12	$12
Budgeted income statement:
Total unit cost	$13	$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 30%.

a. Prepare the direct labor budget for the year. (Round Direct labor time per unit answers to 1 decimal place, e.g. 52.5.)

DELEON INC. Direct Labor Budget choose the accounting period
	JB 50	JB 60	Total
select an opening name	enter a number of units
select an item		enter a number of hours
select a summarizing line
select an item	$enter a dollar amount
select a closing name			$enter a total for the row

b. Prepare the budegeted multiple-step income statement for the year. (Note: income taxes are not allocated to the products).

DELEON INC. Budgeted Income Statement choose the accounting period
	JB 50	JB 60	Total
select an opening income statement item	$enter a dollar amount	$enter a dollar amount	$enter a total for the row
select an income statement item
select a summarizing line for the first part
select an opening section name
select an income statement item
select an income statement item
select a closing section name
select a summarizing line for the second part
select an income statement item
select a summarizing line for the third part
select an income statement item			enter a dollar amount
select a closing name for this statement			$enter a total net income or loss amount

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