Question

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.

3.

value:
3.33 points

Required information

Required:
1. Determine Shadee's budgeted total sales for May and June.

  

2. Determine Shadee's budgeted production in units for May and June.

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References

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4.

value:
3.33 points

Required information

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. Additionally, Shadee’s fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.25 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 calculations. Round your answers to 2 decimal places.)

Hints

References

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Hint #1

Check my work

5.

value:
3.33 points

Required information

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.

Answer 1

SALES BUDGET FOR JUNE MAY AND JUNE
	MAY	JUNE
EXPECTED SALE OF SUN VISORS	600	800
TOTAL BUDGETED SALE@$18	10800	14400
PRODUCTION BUDGET FOR MAY AND JUNE
	MAY	JUNE
BEGINNING FINISHED GOODS INVENTORIES	75	50
CLOSING FINISHED GOODS INVENTORIES REQUIRED	50	60
SALE OF FINISHED GOODS INVENTORIES	600	800
PRODUCTION REQUIRED=SALE+CLOSING-BEGINNING	575	810
BUDGETED COST OF CLOSURES FOR MAY AND JUNE
	MAY	JUNE
PRODUCTION REQUIRED=SALE+CLOSING-BEGINNING	575	810
CLOSURES REQUIRED FOR PRODUCTION	575	810
OPENING CLOSURE IN STOCK	30	20
CLOSING CLOSURE IN STOCK	20	25
CLOSURE REQUIRED TO BE PURCHASED	565	815
BUDGETED COST OF CLOSURES PURCHASED@$1.50	$          847.50	$      1,222.50
BUDGETED MANUFACTURING OVERHEAD COST FOR MAY AND JUNE
PRODUCTION REQUIRED=SALE+CLOSING-BEGINNING	575	810
VARIABLE MANUFACTURING OVERHEAD@$1.25	$          718.75	$      1,012.50
FIXED MANUFACTURING OVERHEAD	$       1,000.00	$      1,000.00
TOTAL BUDGETED MANUFACTURING OVERHEAD	$       1,718.75	$      2,012.50
BUDGETED DIRECT LABOUR COST FOR MAY AND JUNE
PRODUCTION REQUIRED=SALE+CLOSING-BEGINNING	575	810
LABOUR HOUR REQUIRED .30 HOUR PER UNIT	172.50	243
LABOUR RATE PER HOUR	$                     9	$                    9
BUDGETED TOTAL DIRECT LABOUR COST	$       1,552.50	$            2,187