1. Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and 19,000 in February. Each lens consists of 2.00 mm of plastic costing $2.50 per mm, 1.7 oz of dye costing $2.80 per ounce, and 0.50 hours direct labor at a labor rate of $18 per unit. Desired inventory levels are:

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

Solution

Lens & Shades Sales Budget
For the Two Months Ending Feb. 28, 2019
	Jan.		Feb.
Expected Sales (units)
Sales Price per Unit
Total Sales Revenue
Total Sales Budgeted for the Two Months Ending Feb. 28, 2019
Lens & Shades Production Budget
For the Two Months Ending Feb. 28, 2019
		Jan.		Feb.
Expected Sales
Desired Ending Inventory
Total Required Units
Beginning Inventory
Required Production
Total Budgeted Production for Two Months Ending Feb. 28, 2019

Lens & Shades Direct Materials Budget
Direct Materials Plastic
For the Year Ended Dec. 31, 2019
		Jan.			Feb.
Units to Be Produced
Direct Material per Unit
Total Pounds Needed for Production
Desired Ending Inventory
Total Material Required
Beginning Inventory
Pounds of Direct Material Purchase Requirements
Cost per mm
Total Cost of Direct Material Purchase
Total Budgeted Direct Materials (plastics) for Two Months Ending Feb. 28, 2019
Lens & Shades Direct Materials Budget
Direct Materials Dye
For the Year Ended Dec. 31, 2019
			Jan.			Feb.
Units to Be Produced
Direct Material per Unit
Total Pounds Needed for Production
Desired Ending Inventory
Total Material Required
Beginning Inventory
Pounds of Direct Material Purchase Requirements
Cost per Ounce
Total Cost of Direct Material Purchase
Total Budgeted Direct Materials (Dye) for Two Months Ending Feb. 28, 2019
Labor Hours per Unit
Labor Rate

Lens & Shades Direct Labor Budget
For the Year Ended Dec. 31, 2019
	Jan.	Feb.
Units to Be Produced
Direct Labor Hours per Unit
Total Required Direct Labor Hours
Labor Cost per Hour
Total Direct Labor Cost
Total Budgeted Labor for Two Months Ending Feb. 28, 2019