Question

Shadee Corp. expects to sell 550 sun visors in May and 380 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 65 and 40 units, respectively. Ending finished goods inventory for June will be 65 units.

Each visor requires a total of $5.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.50 each. Shadee wants to have 28 closures on hand on May 1, 17 closures on May 31, and 20 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.00 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 values. Round your answers to 2 decimal places.)

Suppose that each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $8 per hour.


3. Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Answer 1

Production Budget
			May	June
Budgeted sales unit			550	380
Add: ending units			40	65
Less: beginning Units			65	40
Budgeted Production units			525	405
Req 1:
Budgeted Cost of Closures
			May	June
Budgeted Production units			525	405
Clsure required per unit			1	1
Closure requirement			525	405
Add: ending Inventory			17	20
Total needs			542	425
Less: Bbegining Inventory			28	17
Clsures purchase units			514	408
Price per clsure			2.50	2.50
Purchases in $			1285.00	1020.00
Req 2:
Budgeted manufacturing OH cost:
				May	June
Budgeted Production units				525	405
variable Manufacturing Oh @1 per unit				525	405
Fixed manufacturing Cost				1000	1000
Budgted Manufacturing OH				1525	1405