Question

Shadee Corp. expects to sell 530 sun visors in May and 330 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 85 and 55 units, respectively. Ending finished goods inventory for June will be 55 units.

2. value: 2.00 points Required info rmation fied E8-6 Preparing Raw Materials Purchases and Manufacturing Overhead Budgets [LO 8-3c, e] 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 32 closures on hand on May 1, 15 closures on May 31, and 22 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $0.75 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.) May June Budgeted Cost of Closures Purchased 2. Determine Shadee's budget manufacturing overhead for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.) May June Budgeted Manufacturing Overhead

Answer 1

D E 2 3 SOLUTION 1 4 Computation of Production units - Shadee Corp 5 Particulars May June Expected sales units Add: ending inventory Less: Beginning inventory 530 330 55 55 7 85 55 Estimated production units of visor 500 10 330 11 12 13 Budgeted Purchase cost of closures - Shadee Corp 14 Particulars May June Budgeted Production units Adjustable closure per unit Estimated consumption of Adjustable Closures Add: ending inventory Less: Beginning inventory 15 330 500 16 1 1 17 500 330 18 15 22 19 32 15 20 337.00 21 Budgeted purchase units of adjustable closures 483.00 $1.50 $1.50 22 Cost per unit of closures 23 $724.50 Budgeted cost of Closures $505.50 24 25 26 SOLUTION 2 27 Budgeted manufacturing overhead budget - Shadee Corp 28 Particulars May June Budgeted Production units Variable overhead cost per unit 29 500 330 $0.75 $0.75 30 31 $247.50 Budgeted variable overhead cost Budgeted fixed overhead cost $375.00 32 $1,000.00 $1,000.00 33 34 $1,375.00 $1,247.50 Budgeted manufacturing overhead 35 36 37 Sheet79 (9) 3) Sheet524 (2) Sheet592 Sheet594 Sheet L