Shadee Corp. expects to sell 520 sun visors in May and 310 in June. Each visor s

Question

Shadee Corp. expects to sell 520 sun visors in May and 310 in June. Each visor sells for $26. Shadee’s beginning and ending finished goods inventories for May are 60 and 60 units, respectively. Ending finished goods inventory for June will be 70 units.

Each visor requires a total of $5.00 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 26 closures on hand on May 1, 21 closures on May 31, and 27 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.75 per unit produced. Each visor takes 0.70 direct labor hours to produce and Shadee pays its workers $12 per hour.   

Additional information:

Selling costs are expected to be 6 percent of sales.

Fixed administrative expenses per month total $1,500.

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

May June Variable selling and administrative expenses 811.2 483.6 Fixed selling and administrative expenses 1500 1500 Budgeted selling and administrative expenses 2311.2 1983.6

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