Question

[The following information applies to the questions displayed below.]

Shadee Corp. expects to sell 620 sun visors in May and 410 in June. Each visor sells for $20. Shadee’s beginning and ending finished goods inventories for May are 70 and 55 units, respectively. Ending finished goods inventory for June will be 55 units.

References

Section BreakSB Exercise E8-5 to E8-10

2.

value:
2.00 points

Required information

E8-6 Preparing Raw Materials Purchases and Manufacturing Overhead Budgets [LO 8-3c, e]

Each visor requires a total of $3.50 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 32 closures on hand on May 1, 15 closures on May 31, and 24 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $2.00 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.)

Answer 1

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

	May	June
Units to be Produced	605	410
Closure required per unit	1	1
Total Closure required for production	605	410
Add: Ending Inventory	15	24
Less: Beginning Inventory	32	15
Closures need to purchased	588	419
X Purchase price per closure	$2	$2
Budgeted cost of closure purchased	$1,176	$838

Explanations :-

	May	June
Units of visiors sold	620	410
Add: Ending Inventory	55	55
Less: Beginning Inventory	70	55
Units to be Produced	605	410

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

	May	June
Units to be Produced	605	410
X Variable manufactruing overhead pu	$2	$2
Total Variable manufacturing overhead	$1,210	$820
Add: Fixed manufacturing overhead	$1,000	$1,000
Budgeted Manufacturing overhead	$2,210	$1,820