[The following information applies to the questions displayed below.] Shadee Cor
ID: 2540023 • Letter: #
Question
[The following information applies to the questions displayed below.]
Shadee Corp. expects to sell 640 sun visors in May and 310 in June. Each visor sells for $26. Shadee’s beginning and ending finished goods inventories for May are 85 and 55 units, respectively. Ending finished goods inventory for June will be 50 units.
1. Determine Shadee's budgeted total sales for May and June.
2. Determine Shadee's budgeted production in units for May and June.
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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 $2.00 each. Shadee wants to have 32 closures on hand on May 1, 22 closures on May 31, and 22 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,500 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.)
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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 $2.00 each. Shadee wants to have 32 closures on hand on May 1, 22 closures on May 31, and 22 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,500 per month, and variable manufacturing overhead is $2.50 per unit produced. Each visor takes 0.80 direct labor hours to produce and Shadee pays its workers $12 per hour.
Additional information:
Selling costs are expected to be 11 percent of sales.
Fixed administrative expenses per month total $1,400.
Required:
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.)
2. Determine Shadee's budgeted production in units for May and June.
May June Budgeted Production (Units) 610 305-------------------------------
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 $2.00 each. Shadee wants to have 32 closures on hand on May 1, 22 closures on May 31, and 22 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,500 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.)
------------------
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 $2.00 each. Shadee wants to have 32 closures on hand on May 1, 22 closures on May 31, and 22 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,500 per month, and variable manufacturing overhead is $2.50 per unit produced. Each visor takes 0.80 direct labor hours to produce and Shadee pays its workers $12 per hour.
Additional information:
Selling costs are expected to be 11 percent of sales.
Fixed administrative expenses per month total $1,400.
Required:
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
Answer
May
June
Budgeted Production (Units)
610
305
Closure Required for production [1 for 1 unit]
610
305
Ending inventory of visors Closure
22
22
Total requirement
632
327
(-) Opening inventory of Closure
32
22
Closures to be purchased
600
305
Cost per closure
$2
$2
Budgeted Cost of Closure purchased
$1200
$610
May
June
Cost of Closures
$1200
$610
Direct materials
$1220
$610
variable manufacturing overhead
$1525
$762.5
Fixed manufacturing overhead
$1500
$1500
Total Budgeted manufacturing Overhead
$5445
$3482.5
May
June
Units to be sold
640
310
Sale Price per unit
$26
$26
Total Sales
$16640
$8060
Selling Cost (11% of sale)
$1830.4
$886.6
Fixed administrative expenses
$1400
$1400
Total Budgeted Selling & Administrative expenses
$3230.4
$2286.6
May
June
Budgeted Production (Units)
610
305
Closure Required for production [1 for 1 unit]
610
305
Ending inventory of visors Closure
22
22
Total requirement
632
327
(-) Opening inventory of Closure
32
22
Closures to be purchased
600
305
Cost per closure
$2
$2
Budgeted Cost of Closure purchased
$1200
$610
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