Question

Required Information [The following Information applies to the questions displayed below.] Shadee Corp. expects to sell 590 sun visors In May and 410 In June. Each visor sells for $22. Shadee's beginning and ending finished goods Inventories for May are 80 and 55 units, respectively. Ending finished goods Inventory for June will be 55 units. 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 $1.50 each. Shadee wants to have 32 closures on hand on May 1, 22 closures on May 31, and 24 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.90 direct labor hours to produce and Shadee pays its workers $9 per hour. Additional Information: • Selling costs are expected to be 7 percent of sales. . Fixed administrative expenses per month total $1,400. Required: Complete Shadee's budgeted Income statement for the months of May and June. (Note: Assume that fixed overhead per unit is $1.40.) (Do not round your intermediate calculations. Round your answers to 2 decimal places.) SHADEE CORP Budgeted Income Statement May June Budgeted Gross Margin Budgeted Net Operating Income

Answer 1

Solution:

В С F 2 3 4 Computation of budgeted manufacturing cost per visor - Shadee 5 Corp 6 Particulars Per Unit $3.50 Direct Material Direct labor (0.90*$9) Variable manufacturing overhead Fixed manufacturing overhead 7 $8.10 8 $1.25 9 $1.40 10 11 $14.25 Budgeted manufacturing cost per unit 12 13 14 15 16 17 18 19 Sheet146 (11) Sheet144 (3) Sheet67 (3) Sheet230 (6) Sheet837 Sheet838 Sheet841 et835

Н K 5 Budgeted Income Statement - Shadee Corp 6 Particulars 7 May June $12,980.00 $9,020.00 $5,842.50 $8,407.50 $4,572.50 $3,177.50 Sales revenue (sale units*$22) 8 Cost of goods sold (sale units *$14.25) Budgeted Gross Margin Selling and administrative expenses: 10 11 Variable selling cost (7% of sales) Fixed administrative expenses $908.60 $1,400.00 $1,400.00 $2,263.90 $1,146.10 $631.40 12 13 Budgeted net operating income 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Sheet144 (3) Sheet230 (6) Sheet837 Sheet838 et835 II