Question

4. Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 19,000 in February. Each lens consists of 2 pounds of silicon costing $2.25 per pound, 3 oz of solution costing $3 per ounce, and 30 minutes of direct labor at a labor rate of $18 per hour. Desired inventory levels are: Jan. 31 Feb. 28 Mar. 31 Beginning inventory Finished goods Direct materials: silicon Direct materials: solution 4,500 8,500 11,200 4,900 9.100 12,000 5,000 9,200 13,000 Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.

Answer 1

A B c D F G H January February 19500 19400 January February 15000 19000 45 45 675000 855000 39000 58500 38800 pounds 58200 oz 8500 11200 9100 12000 January February 15000 19000 4500 4900 19500 23900 E MATERIAL BUDGET Units to be produced Material required Silicon (2 pounds) Solution (3 Oz) Add: desired rending imventory Silicon Solution Less: opening direct material Silicon Solution Direct material purchases Silicon Solution Rate per unit Silicon Solution Raw material cost Silicon Solution 0 -8500 - 11200 1 SALES BUDGET 2 3 Estimated Units 4 Sale Price 5 Estimated Sales ($) 6 7 PRODUCTION BUDGET 8 9 Sales (Units) 10 Planned ending finished goods 11 Total Production required 12 Less: bginning finished goods 13 Estimated production 14 15 Labour Budget 16 17 Units o be produced 18 Direct labour hr per unit 19 Hour required 20 Hourly rate 21 Estimated labour cost 22 0 0 4500 19400 19500 47500 56400 69700 81400 2.25 3 2.25 3 January February 19500 19400 0.5 0.5 9750 9700 18 18 175500 174600 106875 126900 244200 209100 Total material cost 315975 371100 23