Question

Martinez 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		403,200		203,300
Unit selling price		$23		$28
Production budget:
Desired ending finished goods units		28,000		17,000
Beginning finished goods units		33,500		12,100
Direct materials budget:
Direct materials per unit (pounds)		1		2
Desired ending direct materials pounds		33,100		16,400
Beginning direct materials pounds		44,900		14,900
Cost per pound		$3		$4
Direct labor budget:
Direct labor time per unit		0.3		0.6
Direct labor rate per hour		$11		$11
Budgeted income statement:
Total unit cost		$14		$22

An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $665,000 for product JB 50 and $362,000 for product JB 60, and administrative expenses of $545,000 for product JB 50 and $344,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

Your answer is partially correct. Try again.

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

MARTINEZ INC. Budgeted Income Statement For the Year Ending December 31, 2017
		JB 50		JB 60		Total
Sales		$ 9273600		$ 5692400		$ 14966000
Cost of Goods Sold
Gross Profit
Operating Expenses
Selling Expenses
Administrative Expenses
Total Operating Expenses
		$		$
Administrative ExpensesBeginning InventoryCost of Goods SoldEnding InventoryGross ProfitIncome before Income TaxesIncome from OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Operating ExpensesPurchasesSalesSelling ExpensesTotal Operating Expenses
Administrative ExpensesBeginning InventoryCost of Goods SoldEnding InventoryGross ProfitIncome before Income TaxesIncome from OperationsInterest ExpenseIncome Tax ExpenseNet Income / (Loss)Operating ExpensesPurchasesSalesSelling ExpensesTotal Operating Expenses
Administrative ExpensesBeginning InventoryCost of Goods SoldEnding InventoryGross ProfitIncome before Income TaxesIncome from OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Operating ExpensesPurchasesSalesSelling ExpensesTotal Operating Expenses						$

Answer 1