Each visor requires a total of $4.00 in direct materials that includes an adjust

Question

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 $1.50 each. Shadee wants to have 30 closures on hand on May 1 closures on May 31, and 25 clasures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.25 per unit produced. Required Information Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to Shadee Corp. expects to sell 600 sun visors in May and 800 in June. Each visor sells for $18. Shadee's beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods Inventory for June will be 60 unlts 2 decimal places.) May June Budgeted Cost of Closures Purchased

Explanation / Answer

1) Budgeted cost of closures purchased :

May june Sales visor 600 800 add: ending inventory 50 60 Total needs 650 860 Less: Beginning inventory (75) (50) Production units 575 810 Raw material per unit 4 4 Raw material needs for production 2300 3240 Add: Desired ending inventory of raw material 20 25 Total raw material needs 2320 3265 less: Beginning inventory of raw material (30) (20) Budgeted purchase quantity 2290 3245 Budgeted purchase cost 3435 4867.50

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