Question

Shadee Corp. expects to sell 620 sun visors in May and 430 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 65 and 45 units, respectively. Ending finished goods inventory for June will be 70 units.

Required information

Required:
1. Determine Shadee's budgeted total sales for May and June.



2. Determine Shadee's budgeted production in units for May and June.

Each visor requires a total of $4.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 26 closures on hand on May 1, 21 closures on May 31, and 22 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,200 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.)



2. Determine Shadee's budget manufacturing overhead for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Suppose that each visor takes 0.20 direct labor hours to produce and Shadee pays its workers $8 per hour.

Required:
Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Answer 1

Required Budgets are as prepared below:

1. Sales Budget
Shadee Corp
Sales Budget
Particulars	May	June	Total
Sale Units (a)	620	430	1,050
*Price per unit (b)	$16	$16	$16
Total Sales (a*b)	$9,920	$6,880	16,800
2. Production Budget
Shadee Corp
Production Budget
Particulars	May	June	Total
Sale Units (a)	620	430	1,050
Planned ending units (b)	45	70	70
Beginning units (c )	65	45	65
Planned production units (d)= (a+b-c)	600	455	1,055
3. Raw material Budget
Shadee Corp
Raw Material Purchase Budget
Particulars	May	June	Total
Planned production units (a)	600	455	1,055
*Direct Material required per unit (b)	4.5	4.5	4.5
Direct Material Required for production (c )	2,700	2,048	4,748
Budgeted ending Direct Material (d)	21	22	22
Beginning Direct Material (e )	26	21	26
Budgeted direct material purchase f= c+d-e	2,695	2,049	4,744
Cost per unit (g)	$2.0	$2.0	$2.0
Budgeted cost of closures purchases	$5,390.00	$4,097.00	$9,487.00
4. Direct labour Budget
Shadee Corp
Manuafcturing Overhead
Particulars	May	June	Total
Unit Produced	600	455	1,055
Variable manufacturing costs (2.75 per unit)	1,650.0	1,251.3	2,901.3
Fixed manufacturing costs	1,200	1,200	2,400
Total manufacturing costs	2,850.00	2,451.25	5,301.25
Shadee Corp
Direct Labour Budget
	Month
Particulars	May	June	Total
Planned production units (a)	600	455	1,055
*Direct labour required per unit (b)	0.2	0.2	0.2
Budgeted Direct labour hours	120	91	211
Cost per direct labour hour	8	8	8
Budgeted Direct labour Cost	$960.00	$728.00	$1,688.00