Question

Shadee Corp. expects to sell 620 sun visors in May and 340 in June. Each visor sells for $24. Shadee’s beginning and ending finished goods inventories for May are 70 and 55 units, respectively. Ending finished goods inventory for June will be 60 units.

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

Budgeted Total Sales May:

Budgeted Total Sales June:

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

Budgeted Production (Units) May:

Budgeted Production (Units) June:

3. value: 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 35 closures on hand on May 1, 18 closures on May 31, and 27 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,200 per month, and variable manufacturing overhead is $1.75 per unit produced.

Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.)

Budgeted Cost of Closures Purchased May:

Budgeted Cost of Closures Purchased June:

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

Budgeted Manufacturing Overhead May:

Budgeted Manufacturing Overhead June:

4. value: Suppose that each visor takes 0.80 direct labor hours to produce and Shadee pays its workers $11 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.)

Budgeted Direct Labor Cost May:

Budgeted Direct Labor Cost June:

please provide detail & how you got the answers please! thank you!

Answer 1

1. Selling Price of a Visor = $24, number of Visors expected to be sold in May = 620, number of Visors expected to be sold in June= 340

Budgeted Sales = Selling price x number of visors sold

Therfore,

Budgetes Sales for May = 24 x 620 = $4880 , Budgetes Sales for June= 24 x 340 =$8160

2. No. of units sold = Begining Inventory + Production - Ending Inventory

Production = No of units sold + Ending Inventory - Begining Inventory

Therfore

Budgeted production for May = 620 + 55 -70 = 605, Budgeted production for June = 340 + 60 -55 = 345

3. (1). As it is known COGS = Begining Inventory + Purchases - Ending Inventory

Purchases = COGS + Ending Inventory - Begining Inventory

As a visor includes an closure and also using matching principle,

COGS of closures = no. of visors expected to be sold x cost of a closure

For the month of May : COGS for = 620 x 2 = $1240, Beginng Inventory = 35 x 2 = $70, Ending Inventory = 18 x 2 = $36 Therefore

Budgeted cost of Closures purchased for May = 1240 + 36 -70 = $1206

For the months of June : COGS for June = 340 x 2 = $680 , Begining Inventory = 18 x 2 = $36 , Ending Inventory = 27 x 2 = $54. Therefore,

Budgeted cost of Closures purchased in June = 680 + 54 -36 = $698

3. (2). Manufacturing overhead = Fixed overhead + Variable overhed

Variable overhead = no of units produced x overhead per unit

Budgeted manufacturing overhead for May = 1200 + (605 x 1.75) = $2258.75 Budgeted manufacturing overhead for June = 1200 + (345 x 1.75) = $1803.75

4. Time taken for visor to be produced = 0.80 Labor hours, Rate per hour = $11

Budgeted Labour Cost = Units produced x time taked to produce (in labor hours) x rate per hour

Budgeted Labour cost for May = 605 x 0.80 x 11 = $5324

Budgeted Labour cost for June = 345 x 0,80 x 11 = $3036