value: 2.00 points Required information E8-6 Preparing Raw Materials Purchases a
ID: 2565178 • Letter: V
Question
value: 2.00 points Required information E8-6 Preparing Raw Materials Purchases and Manufacturing Overhead Budgets LO 8-3c, el 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 $2.50 each. Shadee wants to have 26 closures on hand on May 1, 17 closures on May 31, and 24 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $800 per month, and variable manufacturing overhead is $1.25 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 Purchased 2. Determine Shadee's budget manufacturing overhead for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.) May June Budgeted Manufacturing OverheadExplanation / Answer
1.
May
June
Beginning Closures balance
26
17
Beginning Visors balance
80
45
Beginning Visors & closure balance
106
62
Ending Closures balance
17
24
Ending Visors balance
45
65
Ending Visors & closure balance
62
89
Budgeted Visors sells
640
310
Budgeted Visor production
(sells+ End. bal-Beg.bal)
596
337
Cost of Closure
$ 2.50
$ 2.50
Budgeted cost of Closures purchase
$ 1,490
$ 842.50
2.
May
June
Budgeted Visor sells
640
310
Add: Ending Visors balance
45
65
Less: Beginning Visors balance
80
45
Budgeted no. of Visors production
605
330
Fixed manufacturing overhead
$ 800
$ 800
Add: Variable manufacturing overhead@$1.25/unit
$ 756.25
$ 412.50
Budgeted total manufacturing overhead
$ 1,556.25
$1,212.50
3.
May
June
Budgeted no. of Visors production
605
330
Direct Labor hors/unit
0.9
0.9
Direct Labor cost/hour
$7
$7
Budgeted Direct Labor Cost
$3,811.50
$2,079.00
May
June
Beginning Closures balance
26
17
Beginning Visors balance
80
45
Beginning Visors & closure balance
106
62
Ending Closures balance
17
24
Ending Visors balance
45
65
Ending Visors & closure balance
62
89
Budgeted Visors sells
640
310
Budgeted Visor production
(sells+ End. bal-Beg.bal)
596
337
Cost of Closure
$ 2.50
$ 2.50
Budgeted cost of Closures purchase
$ 1,490
$ 842.50
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