Question

Shadee Corp. expects to sell 520 sun visors in May and 430 in June. Each visor sells for $20. Shadee’s beginning and ending finished goods inventories for May are 70 and 60 units, respectively. Ending finished goods inventory for June will be 60 units. 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 $2.50 each. Shadee wants to have 26 closures on hand on May 1, 16 closures on May 31, and 22 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1500 per month, and variable manufacturing overhead is $1.25 per unit produced. 1. Determine Shadee's budgeted cost of closures purchased for May and June (Round your answers to 2 decimal places) 2. Determine Shadee's budgeted manufacturing overhead for May and June (Round your answers to 2 decimal places) Suppose that each visor takes 0.40 direct labor hours to produce and Shadee pays its workers $11 per hour. 1. Determine Shadee's budgeted direct labor cost for May and June (Round your answers to 2 decimal places) 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 $2.50 each. Shadee wants to have 26 closures on hand on May 1, 16 closures on May 31, and 22 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.40 direct labor hours to produce and Shadee pays its workers $11 per hour. 1. Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $1.90.) (Round your answers to 2 decimal places) 2. Compute the Shadee’s budgeted cost of goods sold for May and June. (Use rounded cost per unit in intermediate calculations.) 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 $2.50 each. Shadee wants to have 26 closures on hand on May 1, 16 closures on May 31, and 22 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,500 per month, and variable manufacturing overhead is $1.25 per unit produced. Each visor takes 0.40 direct labor hours to produce and Shadee pays its workers $11 per hour.     Additional information:    • Selling costs are expected to be 6 percent of sales. • Fixed administrative expenses per month total $1,700. 1. Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations.) 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 $2.50 each. Shadee wants to have 26 closures on hand on May 1, 16 closures on May 31, and 22 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.40 direct labor hours to produce and Shadee pays its workers $11 per hour.          Additional information:       • Selling costs are expected to be 6 percent of sales. • Fixed administrative expenses per month total $1,700.          Required: Complete Shadee's budgeted income statement for the months of May and June. (Note: Assume that fixed overhead per unit is $1.90.) (Round your answers to 2 decimal places.)

Answer 1

1	Budgeted Total Sale
		May	June
A	Budgeted Sale Units	520	430
B	Selling Price Per Unit	20	20
A*B=C	Budgeted Total Sale	10400	8600
2	Budgeted Production Units
A	Opening FG Inventory Units	70	60
B	Closing FG Inventory Units	60	60
C	Budgeted Sales Units	520	430
C+B-A	Budgeted Production Units	510	430

Part-2

1	Closure Cost of Purchase
		May	June
A	Opening Inventory of Closure	26	16
B	Closing Inventory of Closure	16	22
C	Closure Used in Production (From Part 2 Above)	510	430
C+B-A=D	Closure Purchased	500	436
E	Cost Per Closure	2.5	2.5
D*E	Cost of Closure Purchased	1250	1090
2	Budgeted Manufacturing Overhead
		May	June
A	Fixed Manuafacturing	1500	1500
B	Variable Manufacturing Overhead (1.25* Production)	637.5	537.5
C	Budgeted Manufacturing Overhead	2137.5	2037.5

Part-3

1	Budgeted Direct Labor Cost
		May	June
A	Direct Labor Cost (0.4 Hour*11 Per Hour*Production)	2332	1804
	(0.4*11*510)        (0.4*11*430)

Part-4

	Budgeted Manufacturing Cost per visor	Unit Sold	May	June
Direct Material	4.5	*520 May,*430 June	2340	1935
Direct Labor 0.4*11	4.4	*520 May,*430 June	2288	1892
Variable Overhead	1.25	*520 May,*430 June	650	537.5
Fixed Overhead	1.9	*520 May,*430 June	988	817
Total Manufacturing Cost per visor	12.05		6266	5181.5