Question

Shadee Corp. expects to sell 590 sun visors in May and 310 in June. Each visor sells for $21. Shadee’s beginning and ending finished goods inventories for May are 75 and 40 units, respectively. Ending finished goods inventory for June will be 55 units.

E8-9 (Algo) Preparing Selling and Administrative Expense Budget [LO 8-3g]

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, 18 closures on May 31, and 21 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,600 per month, and variable manufacturing overhead is $1.25 per unit produced. Each visor takes 0.20 direct labor hours to produce and Shadee pays its workers $7 per hour.

 

Additional information:

• Selling costs are expected to be 8 percent of sales.

• Fixed administrative expenses per month total $1,300.

 

Required:

Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places.)