Question
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
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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:
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 | |||||
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