Question

Shadee Corp. expects to sell 650 sun visors In May and 440 in June. Each visor sells for $14. Shadee's beginning and ending finished goods Inventories for May are 65 and 55 units, respectively. Ending finished goods Inventory for June will be 65 units.

Answer 1

1. sales budget

	May	june
sales unit a	650	440
price b	14	14
budgeted total sales a*b	9100	6160

2.budgeted production

beginning+ production - ending = sales

	may	june
sales	650	440
add: ending	55	65
less: beginning	65	55 (ending of May is beginning for june)
production	640	450

3.budegted cost of closure purchased

	May	june
production	640	450
closure per visor	1	1
closure required for production	640	450
add: ending inventory	18	21
less: beginning	30	18 [ ending of may]
purchase of closures in unit	628[640+18-30]	453[450+21-18]
cost per closure	2$	2$
budgeted purchase of closure	1256	906

4.manufacturing overhead

	May	June
production	640	450
variable cost per unit	2.75	2.75
Total variable overhead	1760	1237.5
fixed cost	1100	1100
total budgeted manufacturing overhead	2860[1760+1100]	2337.5[1237.5+1100]

5.labor cost

	May	June
production	640	450
per unit labor	0.20	0.20
budgeted labor hours	128[640*0.2]	90[450*0.2]
cost pe rhour	7	$7
budgeted labor cost	$896[128*7]	$630[90*7]