[The following information applies to the questions displayed below.] Shadee Cor

Question

[The following information applies to the questions displayed below.]

Shadee Corp. expects to sell 640 sun visors in May and 410 in June. Each visor sells for $20. Shadee’s beginning and ending finished goods inventories for May are 70 and 40 units, respectively. Ending finished goods inventory for June will be 55 units.

1. 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 26 closures on hand on May 1, 16 closures on May 31, and 23 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $800 per month, and variable manufacturing overhead is $2.00 per unit produced.

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

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

2. Suppose that each visor takes 0.50 direct labor hours to produce and Shadee pays its workers $11 per hour.

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

3. 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 26 closures on hand on May 1, 16 closures on May 31, and 23 closures on June 30 and variable manufacturing overhead is $2.00 per unit produced. Suppose that each visor takes 0.50 direct labor hours to produce and Shadee pays its workers $11 per hour.

A. Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $1.80.) (Round your answer to 2 decimal places.)

B. Compute the Shadee’s budgeted cost of goods sold for May and June. (Do not round your intermediate values. Use rounded cost per unit in intermediate calculations.)

4. 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 26 closures on hand on May 1, 16 closures on May 31, and 23 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $800 per month, and variable manufacturing overhead is $2.00 per unit produced. Each visor takes 0.50 direct labor hours to produce and Shadee pays its workers $11 per hour.

Additional information:

Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places.)

Explanation / Answer

Solution 1A:

Budgeted Purchase of cost of closures - Shadee Corp

Solution 1B:

Solution 2:

Solution 3 A:

Solution 3B:

Solution 4:

Production Budget - Shadee Corp Particulars May June Expected sales units 640 410 Add: ending inventory 40 55 Less: Beginning inventory 70 40 Estimated production units of visor 610 425

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