Question

Shadee Corp. expects to sell 630 sun visors in May and 360 in June. Each visor sells for $20. Shadee’s beginning and ending finished goods inventories for May are 75 and 45 units, respectively. Ending finished goods inventory for June will be 60 units.

1. a)-Determine Shadee's budgeted total sales for May and June.

-Determine Shadee's budgeted production in units for May and June.
b) 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 33 closures on hand on May 1, 20 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 $1.25 per unit produced.
-Determine Shadee's budgeted cost of closures purchased for May and June.

-Determine Shadee's budget manufacturing overhead for May and June.

c) Suppose that each visor takes 0.70 direct labor hours to produce and Shadee pays its workers $11 per hour.
- Determine Shadee's budgeted direct labor cost for May and June.

d) 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 33 closures on hand on May 1, 20 closures on May 31, and 27 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.70 direct labor hours to produce and Shadee pays its workers $11 per hour.   
   - Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $1.30.)

-  Compute the Shadee’s budgeted cost of goods sold for May and June.

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 33 closures on hand on May 1, 20 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 $1.25 per unit produced. Each visor takes 0.70 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 $1,200.

- Determine Shadee's budgeted selling and administrative expenses for May and June.

f) 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 33 closures on hand on May 1, 20 closures on May 31, and 27 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.70 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 $1,200.

- Complete Shadee's budgeted income statement for the months of May and June. (Note: Assume that fixed overhead per unit is $1.30.)

Answer 1