Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 18,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 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. 31Feb. 28Mar. 31Beginning inventory Finished goods4,5004,9005,000 Direct materials: Silicon8,5009,1009,200 Direct materials: Solution11,20012,00013,000 Required:Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.

Budget is prepared for controlling the costs incurred by estimating the costs and revenues in…

Answered: Prepare a sales budget, production…

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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Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 18,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 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	4,500	4,900	5,000
Direct materials: Silicon	8,500	9,100	9,200
Direct materials: Solution	11,200	12,000	13,000

Required:

Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.

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