Shadee Corp. expects to sell 600 sun visors in May and 800 in June. Each visor s

Question

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 units.

a) 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, 20 closures on May 31, and 25 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.25 per unit produced.

b)

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

Explanation / Answer

a.

b. Budgeted Manufacturing Cost Per Visor

c. Budgeted Cost of Goods Sold for May and June

SUN VISOR May June Beginning Qty 75 50 Req to Produce 575 810 Sale of Units 600 800 Ending Qty 50 60

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