Prepare a production budget

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Question - 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 -

1. Prepare a sales budget. From the budget, identify the Total Sales Revenue for the months of January and February.

2. Prepare a production budget. From the budget, identify the Total Required Production for the months of January and February.

Reference no: EM133148098

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