Prepare the sales budgets for the year

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Reference no: EM133189128

Question - Bacon Inc. is preparing its annual budgets for the year ending December 31, 2017. Accounting assistants furnish the following data.

 

Product  A

Product  B

Sales Budget:



Anticipated volume in units

410 000

250 000

Unit selling price

$25

$35

Production budget:



Desired ending finished goods units

20 000

25 000

Beginning finished goods units

30 000

15 000

Direct material budget:



Direct material per unit (pounds)

2

3

Desired ending direct material pounds

50 000

10 000

Beginning direct materials pounds

40 000

20 000

Cost per pound

$2

$3

Direct labor budget:



Direct labor time per unit

0.5

0.75

Direct labor rate per hour

$12

$12

Budgeted income statement:



Total unit cost

$12

$22

An accounting assistant has prepared the detailed manufacturing overhead budget and selling and administrative expense budget. The latter shows selling expenses of $750,000 for Product A and $580,000 for Product B, and administrative expenses of $420,000 for Product A and $380,000 for Product B. Income taxes are expected to be 20%.

Required - Prepare the following budgets for the year. Show data for each product. Quarterly budgets need not be prepared.

a) Sales

b) Production

c) Direct materials

d) Direct labor

e) Income statement

Reference no: EM133189128

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