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In: Accounting

Shadee Corp. expects to sell 580 sun visors in May and 310 in June. Each visor sells for $22.

Shadee Corp. expects to sell 580 sun visors in May and 310 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 70 and 60 units, respectively. Ending finished goods inventory for June will be 70 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 $2.00 each. Shadee wants to have 31 closures on hand on May 1, 17 closures on May 31, and 26 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,400 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.

2. Determine Shadee's budget manufacturing overhead for May and June.

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