Question

Shadee Corp. expects to sell 510 sun visors in May and 420 in June. Each visor sells for $21. Shadee’s beginning and ending finished goods inventories for May are 80 and 45 units, respectively. Ending finished goods inventory for June will be 70 units.

Each visor requires a total of $4.50 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 35 closures on hand on May 1, 22 closures on May 31, and 24 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,100 per month, and variable manufacturing overhead is $2.00 per unit produced. Each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $10 per hour.

Additional information:

• Selling costs are expected to be 8 percent of sales.
• Fixed administrative expenses per month total $1,300.

1. Determine Shadees Budgeted Selling and Administrative Expenses for May and June

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 3 Statement of Budgeted selling and adminstrative expenses 4 Particulars May June 5 Selling Cost 856.80 705.60 (510*21*8%) (420*21*8%) 7 Adminstrative expenses 1300.00 1300.00 9 Total selling and adminstrative expenses 11 Thus the final answer May 2156.80 June 2005.60 L3 Selling and adminstrative expenses