1. Soft Glow Candle Co. budgeted production of 78,900 candles in 2012. Wax is required to produce a candle. Assume 8 ounces (one half of a pound) of wax is required for each candle. The estimated January 1, 2012, wax inventory is 2,000 pounds. The desired December 31, 2012, wax inventory is 2,400 pounds. If candle wax costs $3.20 per pound, determine the direct materials purchases budget for 2012. (Worth 4 points)

78,900*0.5= 39,450lbs

39,450+2400= 41,850

41,850-2000=39,850

39,850*3.20=127,520

2. Soft Glow Candle Co. budgeted production of 78,900 candles in 2012. Each candle requires molding. Assume that 15 minutes are required to mold each candle. If molding labor costs $16 per hour, determine the direct labor cost budget for 2012.

Prepare a cost of goods sold budget for Soft Glow Candle Co. using the information in the Questions above #2 & 3. Assume the estimated inventories on January 1, 2012, for finished goods and work in process were $12,000 and $4,000, respectively. Also assume the desired inventories on December 31, 2012, for finished goods and work in process were $11,200 and $5,000, respectively. Factory overhead was budgeted at $108,000.