Question

SB Exercise E8-5 to E8-10 [The following information applies to the questions displayed below.] Shadee Corp. expects to sell 570 sun visors in May and 440 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 70 and 50 units, respectively. Ending finished goods inventory for June will be 70 units. 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 31 closures on hand on May 1, 17 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 $0.75 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.) HintsReferenceseBook & Resources Hint #1 Check my workPrevious attempt 3.value: 1.00 pointsRequired information You did not receive full credit for this question in a previous attempt E8-7 Preparing Direct Labor Budget [LO 8-3d] Suppose that each visor takes 0.70 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.)

Answer 1

Solution 1:

Production Budget - Shadee Corp
Particulars	May	June
Expected sales units	570	440
Add: ending inventory	50	70
Less: Beginning inventory	70	50
Estimated production units of visor	550	460

Budgeted Purchase of cost of closures - Shadee Corp
Particulars	May	June
Budgeted Production units	550	460
Adjustable closure per unit	1	1
Estimated consumption of Adjustable Closures	550	460
Add: ending inventory	17	22
Less: Beginning inventory	31	17
Budgeted purchase units of adjustable closures	536	465
Cost per unit of closures	$2.00	$2.00
Budgeted cost of purchases	$1,072.00	$930.00

Solution 2:

Budgeted manufacturing overhead budget - Shadee Corp
Particulars	May	June
Budgeted Production units	550	460
Variable overhead cost per unit	$0.75	$0.75
Budgeted variable overhead cost	$412.50	$345.00
Budgeted fixed overhead cost	$1,500.00	$1,500.00
Budgeted manufacturing overhead	$1,912.50	$1,845.00

Solution 3:

Budgeted labor cost budget - Shadee Corp
Particulars	May	June
Budgeted Production units	550	460
Direct labor hours per unit	0.70	0.70
Budgeted direct labor hours	385	322
direct labor cost per hour	$11.00	$11.00
Budgeted direct labor cost	$4,235.00	$3,542.00