Each visor requires a total of $4.00 in direct materials that includes an adjust

Question

Each visor requires a total of $4.00 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 35 closures on hand on May 1, 16 closures on May 31, and 26 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,300 per month, and variable manufacturing overhead is $2.50 per unit produced.

Required:
1. Determine Shadee's budgeted cost of closures purchased for May and June. (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

1. Budget cost of closure for the month of May As shadee wants to have 35 closures in hand then cost of 35 closures= 35*1.50=$52.50 Budget cost of closure for the month of June Closurs on hand as on 31st may = 16 Closurs on hand as on 30 the June = 26 purchased during the month of June= 26-16=10 Cost of 10 closures = 10*1.50= $15.00 2. Manufacturing Overhead for May Units produced= opening closures in hand-Closing closures in hand Units produced=35-16=19 Fixed Manufacturing Overhead=$1300 Variable Manufacturing Overhead=19*2.50=47.50 Total=$1300+$47.50=$1347.50 Manufacturing Overhead for May Units produced= opening closures in hand-Closing closures in hand Units produced=16-26=-10 Units Produced=NIL Fixed Manufacturing Overhead=$1300 Variable Manufacturing Overhead Total=$1300+$0=$1300.00

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