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Pronghorn Inc

Finance

Pronghorn 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 units403,300202,500    Unit selling price$21$28Production budget:    Desired ending finished goods units26,80016,700    Beginning finished goods units33,80012,900Direct materials budget:    Direct materials per unit (pounds)12    Desired ending direct materials pounds33,30018,800    Beginning direct materials pounds44,80013,300    Cost per pound$3$3Direct labor budget:    Direct labor time per unit0.40.6    Direct labor rate per hour$12$12Budgeted income statement:    Total unit cost$14$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 $364,000 for product JB 60, and administrative expenses of $541,000 for product JB 50 and $341,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

 

 

 

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

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