Shadee Corp. expects to sell 630 sun visors in May and 300 in June. Each visor s

Question

Shadee Corp. expects to sell 630 sun visors in May and 300 in June. Each visor sells for $15. Shadee’s beginning and ending finished goods inventories for May are 65 and 45 units, respectively. Ending finished goods inventory for June will be 55 units.

2. 200 points value: Required information You did not receive full credit for this question in a previous attempt E8-6 Preparing Raw Materials Purchases and Manufacturing Overhead Budgets [LO 8-3c, e] Each visor requires a total of $3.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shade wants to have 27 closures on hand on May 1, 21 closures on May 31, and 26 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,000 pe month, and variable manufacturing overhead is $1.00 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.) May June Budgeted Cost of Closures Purchased 2. Determine Shadee's budget manufacturing overhead for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.) May June Budgeted Manufacturing Overhead

Explanation / Answer

Production Budget: May June Sales Units 630 300 Add: Desired ending inventory 45 55 Total requirement 675 355 Less: Desired Beginning Inventory 65 45 Budgeted Production units 610 310 Purchase budget of Closure May June Budgetdd Production units 610 310 Requirement of closure per unit 1 1 Total Production requirement 610 310 Add: Desired ending inventory 21 26 Total requirement 631 336 Less: Desired beginning inventory 27 21 Purchasse units 604 315 Cost per unit 2 2 Budgeted Purchase in $ 1208 630 Budget Manufacturing OH May June Budgeted Production units 610 310 Variable Manufacturing Oh @ 1 610 310 Fixed manufacturing OH 1000 1000 Budgeted Manufacturing OH 1610 1310 Budgeted Labour cost: May June Budgeted Production units 610 310 Labour requirement per unit 0.3 0.3 Total labour hours 183 93 Labour rate per houor 11 11 Budgeted labour cost 2013 1023

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