Lens Junction sells lenses for $44 each and is estimating sales of 16,000 units in January and 17,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 per pound, 3 oz of solution costing $3 per ounce, and 15 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 4,300 4,800 4,900 Direct materials: silicon 8,300 9,200 9,000 Direct materials: solution 11,000 12,200 12,900

Complete Question:

1. Prepare a sales budget. Lens Junction Sales Budget For the Two Months Ending February 28, 20XX January February Expected Sales (Units) Sales Price per Unit Total Sales Revenue Total

2. Prepare a production budget. Lens Junction Production Budget For the Two Months Ending February 28, 20XX January February Expected Sales Total Required Units Required Production Total

3. Prepare direct materials budget for silicon. Lens Junction For the Two Months Ending Fabrant Materials, Purinat for Silinn February Expected Sales Total Required Units Required Production Total

4.Prepare direct materials budget for silicon.

Answer:

Lens Junction

1. Lens Junction Sales Budget For the Two Months Ending February 28, 20XX

                                         January      February

Expected Sales (Units)     16,000         17,000

Sales Price per Unit           $44              $44

Total Sales Revenue     $704,000    $748,000

2. Lens Junction Production Budget For the Two Months Ending February 28, 20XX

                                              January      February

Expected Sales Total             16,000         17,000

Ending Inventory                     4,800          4,900

Required Units                     20,800         21,900

Beginning Inventory               4,300          4,800

Required Production Total   16,500          17,100

3 & 4. Lens Junction Direct Materials Budget For the Two Months Ending February

                                               January            February

                                        Silicon  Solution   Silicon   Solution

Expected Sales            32,000     48,000    34,000   51,000

Ending inventory            9,200      9,000     12,200   12,900

Total Required              41,200    57,000    46,200   63,900

Beginning inventory      8,300      11,000      9,200    12,200

Units Required            32,900    46,000    37,000    51,700

Explanation:

a) Data and Calculations:

Sales price of lenses per unit = $44

Estimated sales of lenses in January and February respectively = 16,000 and 17,000

Direct materials for each lense:

2 pounds of silicon at $2.50 per pound = $5.00

3 oz of solution at $3.00 per ounce = $9.00

Total cost of direct materials per unit = $14

15 minutes direct labor at $18 per hour = $4.50

Desired inventory levels:

Beginning inventory of finished goods:

January 4,300

February 4,800

March 4,900

Beginning inventory of direct materials:

                   Silicon  Solution

January       8,300    11,000

February    9,200   12,200

March        9,000    12,900