Problem 1 - Production budget

Pasadena Candle Inc. projected sales of 56,000 candles for the year. The estimated January 1 inventory is 3,400 units, and the desired December 31 inventory is 6,000 units.

Prepare a production budget report in units for Pasadena Candle Inc.

Problem 2 - Direct materials purchase budget

Pasadena Candle Inc. budgeted production of 700,000 candles for the year. Wax is required to produce a candle. Assume 12 ounces of wax is required for each candle. The estimated January 1 wax inventory is 18,500 pounds. The desired December 31 wax inventory is 13,200 pounds. If candle wax costs $1.50 per pound, determine the direct materials purchases budget for the year. (One pound = 16 ounces.) Prepare a direct materials budget. Round all computed answers to the nearest whole dollar

Problem 3 - Direct labor cost budget

Pasadena Candle Inc. budgeted the production of 63,000 candles for the year. Each candle requires molding. Assume that three minutes are required to mold each candle. Molding labor costs $10.25 per hour. Prepare the direct labor cost budget for the year.

Round hourly rate to the nearest cent, if required.

Problem 4 - Cost of goods sold budget

Pasadena Candle Inc. budgeted production of 785,000 candles for the year. Each candle requires molding. Assume that six minutes are required to mold each candle. If molding labor costs $18 per hour, determine the direct labor cost budget for the year. Wax is required to produce a candle. Assume 487,125 pounds of material will be purchased during the year. If candle wax costs $1.24 per pound, determine the direct materials purchases for the year.

Prepare a cost of goods sold budget for Pasadena Candle Inc. using the information above. Assume the estimated inventories on January 1 for finished goods and work in process were $200,000 and $41,250, respectively and direct materials wax inventory of 16,000 pounds. Also, assume the desired inventories on December 31 for finished goods and work in process were $120,000 and $28,500, respectively and direct materials wax inventory of 12,500 pounds. Factory overhead was budgeted at $300,000.

Prepare the cost of goods sold budget for the year.