[The following information applies to the questions displayed below.] Shadee Cor
ID: 2563177 • Letter: #
Question
[The following information applies to the questions displayed below.] Shadee Corp. expects to sell 560 sun visors in May and 430 in June. Each visor sells for $23. Shadee's beginning and ending finished goods inventories for May are 85 and 45 units, respectively. Ending finished goods inventory for June will be 60 units. References Section Break SB Exercise E8-5 to E8-10 2. 2.00 points Required information E8-6 Preparing Raw Materials Purchases and Manufacturing Overhead Budgets LO 8-3c, e] 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 34 closures on hand on May 1, 19 closures on May 31, and 26 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $800 per month, and variable manufacturing overhead is $2.75 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.) May June Budgeted Cost of Closures PurchasedExplanation / Answer
Solution:
1)
May
June
a
Expected Sales Unit
560.00
430.00
b
Plus: Ending Inventory of visor
45.00
60.00
c = a+b
Total needs
605.00
490.00
d
Less: Beginning Inventory of visor
85.00
45.00
e = c-d
Budgeted Production Units
520.00
445.00
f
Require Raw material closures per unit ($5 / 1.50) (Refer note 1)
3.33
3.33
g = e+f
Total Closures required
1733.33
1483.33
h
Plus: Ending Closures Unit
19.00
26.00
I = g+h
Total Needs
1752.33
1509.33
J
Less: Beginning Closure Unit
34.00
19.00
K =(I - J)
Required Purchase of Closure in unit
1718.33
1490.33
L
Cost of Closure per unit
$1.50
$1.50
K*L
Budgeted Cost of Closures Purchases
$2,577.50
$2,235.50
Note 1 --- Per Unit of Visor Cost = $5.00 raw material
Purchase Price per closure = $1.50
Total Quantity of Closure required for Per unit of Visor = $5 / 1.5 = 3.33 Closures
2)
Budgeted Manufacturing Overhead
May
June
a
Budgeted Production Units (From part 1)
520
445
b
Variable Manufacturing Overhead Rate per production unit
$2.75
$2.75
c = a*b
Variable Manufacturing Overhead
$1,430.00
$1,223.75
d
Fixed Manufacturing Overhead
$800
$800
c+d
Total Budgeted Manufacturing Overhead
$2,230.00
$2,023.75
3)
Budgeted Direct Labor Cost
May
June
a
Budgeted Production Units (From part 1)
520
445
b
Direct labor hour needed per unit
0.7
0.7
c = a*b
Total Direct labor hours needed
364.000
311.500
d
Rate per Direct labor hour
$9
$9
c*d
Budgeted Direct labor cost
$373.00
$320.50
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
May
June
a
Expected Sales Unit
560.00
430.00
b
Plus: Ending Inventory of visor
45.00
60.00
c = a+b
Total needs
605.00
490.00
d
Less: Beginning Inventory of visor
85.00
45.00
e = c-d
Budgeted Production Units
520.00
445.00
f
Require Raw material closures per unit ($5 / 1.50) (Refer note 1)
3.33
3.33
g = e+f
Total Closures required
1733.33
1483.33
h
Plus: Ending Closures Unit
19.00
26.00
I = g+h
Total Needs
1752.33
1509.33
J
Less: Beginning Closure Unit
34.00
19.00
K =(I - J)
Required Purchase of Closure in unit
1718.33
1490.33
L
Cost of Closure per unit
$1.50
$1.50
K*L
Budgeted Cost of Closures Purchases
$2,577.50
$2,235.50
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.