Question

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

Shadee Corp. expects to sell 600 sun visors in May and 800 in June. Each visor sells for $18. Shadee’s beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 60 units

C.

Suppose that each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $9 per hour.        

Required:

Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places.)

	May June Budgeted Direct Labor Cost

HintsReferenceseBook & Resources

Hint #1

Check my work

D.

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 $1.50 each. Shadee wants to have 30 closures on hand on May 1, 20 closures on May 31 and 25 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $9 per hour.     

Required:

1. Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $2.) (Round your answer to 2 decimal places.)

   

	Manufacturing Cost per Unit

         

2. Determine Shadee's budgeted cost of goods sold for May and June. (Do not round your intermediate calculations. Use rounded cost per unit in intermediate calculations.)

	May June Budgeted Cost of Goods Sold

Answer 1

Solution C:

Production Budget - Shadee Corp
Particulars	May	June
Expected sales units	600	800
Add: ending inventory	50	60
Less: Beginning inventory	75	50
Estimated production units of visor	575	810

Budgeted labor cost budget - Shadee Corp
Particulars	May	June
Budgeted Production units	575	810
Direct labor hours per unit	0.30	0.30
Budgeted direct labor hours	172.5	243
direct labor cost per hour	$9.00	$9.00
Budgeted direct labor cost	$1,552.50	$2,187.00

Solution D1:

Computation of budgeted manufacturing cost per visor - Shadee Corp.
Particulars	Per Unit
Direct Material	$4.00
Direct labor (0.3*$9)	$2.70
Variable manufacturing overhead	$1.25
Fixed manufacturing overhead	$2.00
Budgeted manufacturing cost per unit	$9.95

Solution D2:

Computation of budgeted cost of goods sold - Shadee Corp
Particulars	May	June
Expected sales units	600	800
Manufacturing cost per unit	$9.95	$9.95
Budgeted cost of goods sold	$5,970.00	$7,960.00