SB Exercise E8-5 to E8-10 [The following information applies to the questions di
ID: 2403122 • Letter: S
Question
SB Exercise E8-5 to E8-10
[The following information applies to the questions displayed below.]
Shadee Corp. expects to sell 640 sun visors in May and 360 in June. Each visor sells for $20. Shadee’s beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 50 units.
Explanation / Answer
Calculation of Budgeted Production of sun visor for the month of May and June:
May
June
No. of Units to be Sold
640
360
Add: Desired Ending Inventory
50
50
less: Beginning Inventory
-75
-50
Budgeted Production
615
360
Answer-1: Budgeted Cost of Closures Purchased for the month of May and June:
May
June
Production Requirement
615
360
Add: Desired Ending Inventory
16
20
Less: Beginning Inventory
-35
-16
Purchases of Closure (A)
596
364
Price of Closure (B)
2
2
Budgeted Cost of Closures Purchased (A * B)
1192
728
Answer-2: Manufacturing Overheads for the month of May and June:
May
June
Variable Manufacturing Overhead:
May = 615 * 1
615
June = 360 * 1
360
Fixed Manufacturing Overhead
800
800
Budgeted Manufacturing Overhead
1415
1160
May
June
No. of Units to be Sold
640
360
Add: Desired Ending Inventory
50
50
less: Beginning Inventory
-75
-50
Budgeted Production
615
360
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