Shadee Corp. expects to sell 530 sun visors in May and 420 in June. Each visor s

Question

Shadee Corp. expects to sell 530 sun visors in May and 420 in June. Each visor sells for $17. Shadee’s beginning and ending finished goods inventories for May are 70 and 55 units, respectively. Ending finished goods inventory for June will be 50 units.

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 $1.50 each. Shadee wants to have 31 closures on hand on May 1, 17 closures on May 31, and 23 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,100 per month, and variable manufacturing overhead is $0.75 per unit produced.

Required:
1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.)
Required:
1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.)

Suppose that each visor takes 0.80 direct labor hours to produce and Shadee pays its workers $6 per hour.

Required:
Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)


2. Determine Shadee's budget manufacturing overhead for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Explanation / Answer

Solution 1:

Solution 2:

Production Budget - Shadee Corp Particulars May June Expected sales units 530 420 Add: ending inventory 55 50 Less: Beginning inventory 70 55 Estimated production units of visor 515 415

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