Shadee Corp. expects to sell 610 sun visors in May and 390 in June. Each visor s

Question

Shadee Corp. expects to sell 610 sun visors in May and 390 in June. Each visor sells for $20. Shadee’s beginning and ending finished goods inventories for May are 80 and 55 units, respectively. Ending finished goods inventory for June will be 60 units.

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 34 closures on hand on May 1, 19 closures on May 31, and 28 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $900 per month, and variable manufacturing overhead is $1.00 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

Budgeted Material Purchase budget (Closured) MAY JUNE Sales units of Visors 610 390 Add: Desired Ending inventory of Visors 55 60 Less: Desired Beginning Inventory of Visors 80 55 Budgeted Productionunits of Visors 585 395 Closures required per unit of visors 1 1 Total closures requirement 585 395 Add: Desired Ending Inventory of closures 19 28 Less: Desired Beginning Inventory of Closures 34 19 Budgted purchase units of Closures 570 404 Purchase price per closures 2.5 2.5 Budgeted Purchase in $ 1425 1010 Manufacturing Overhead Budget: MAY JUNE Sales units of Visors 610 390 Add: Desired Ending inventory of Visors 55 60 Less: Desired Beginning Inventory of Visors 80 55 Budgeted Productionunits of Visors 585 395 Manufacturing Overheads: Variable($1.00 per unit produced) 585 395 Fixed Manufacturing overheads 900 900 Budgeted manufacturing overheads 1485 1295

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