Question

PART 1

Shadee Corp. expects to sell 550 sun visors in May and 320 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 60 and 50 units, respectively. Ending finished goods inventory for June will be 65 units.

Required:

1. Determine Shadee's budgeted total sales for May and June.

2. Determine Shadee's budgeted production in units for May and June.

• Required 1

Determine Shadee's budgeted total sales for May and June.

	May June Budgeted Total Sales

Required 2

Determine Shadee's budgeted production in units for May and June.

	May June Budgeted Production (Units)

PART 2

Shadee Corp. expects to sell 550 sun visors in May and 320 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 60 and 50 units, respectively. Ending finished goods inventory for June will be 65 units.

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 $2.00 each. Shadee wants to have 26 closures on hand on May 1, 16 closures on May 31, and 20 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,500 per month, and variable manufacturing overhead is $1.25 per unit produced.

Required:

1. Determine Shadee's budgeted cost of closures purchased for May and June.

2. Determine Shadee's budget manufacturing overhead for May and June.

• 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

required 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

PART 3

Shadee Corp. expects to sell 550 sun visors in May and 320 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 60 and 50 units, respectively. Ending finished goods inventory for June will be 65 units

Suppose that each visor takes 0.40 direct labor hours to produce and Shadee pays its workers $7 per hour.

Required:

Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)
Budgeted Direct Labor Cost MAY JUNE

PART 4

Shadee Corp. expects to sell 550 sun visors in May and 320 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 60 and 50 units, respectively. Ending finished goods inventory for June will be 65 units.

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 $2.00 each. Shadee wants to have 26 closures on hand on May 1, 16 closures on May 31, and 20 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.40 direct labor hours to produce and Shadee pays its workers $7 per hour.

Required:

1. Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $6.)

2. Compute the Shadee’s budgeted cost of goods sold for May and June.

• Required 1

Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $6.) (Round your answer to 2 decimal places.)

	Manufacturing Cost per Unit

• Required 2

Compute the Shadee’s budgeted cost of goods sold for May and June. (Round your intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.)

	May June Budgeted Cost of Goods Sold

PART 5

Shadee Corp. expects to sell 550 sun visors in May and 320 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 60 and 50 units, respectively. Ending finished goods inventory for June will be 65 units.

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 $2.00 each. Shadee wants to have 26 closures on hand on May 1, 16 closures on May 31, and 20 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,500 per month, and variable manufacturing overhead is $1.25 per unit produced. Each visor takes 0.40 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 $1,600.

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.)

	May June Budgeted Selling and Administrative Expenses

Answer 1

Solution :

Sales Budget - Shadee Corp
Particulars	May	June
Expected sales units	550	320
Selling price per unit	$22.00	$22.00
Budgeted Total Sales	$12,100.00	$7,040.00

Production Budget - Shadee Corp
Particulars	May	June
Expected sales units	550	320
Add: ending inventory	50	65
Less: Beginning inventory	60	50
Estimated production units of visor	540	335

Budgeted Purchase of cost of closures - Shadee Corp
Particulars	May	June
Budgeted Production units	540	335
Adjustable closure per unit	1	1
Estimated consumption of Adjustable Closures	540	335
Add: ending inventory	16	20
Less: Beginning inventory	26	16
Budgeted purchase units of adjustable closures	530	339
Cost per unit of closures	$2.00	$2.00
Budgeted cost of purchases	$1,060.00	$678.00

Budgeted manufacturing overhead budget - Shadee Corp
Particulars	May	June
Budgeted Production units	540	335
Variable overhead cost per unit	$1.25	$1.25
Budgeted variable overhead cost	$675.00	$418.75
Budgeted fixed overhead cost	$1,500.00	$1,500.00
Budgeted manufacturing overhead	$2,175.00	$1,918.75

Budgeted labor cost budget - Shadee Corp
Particulars	May	June
Budgeted Production units	540	335
Direct labor hours per unit	0.40	0.40
Budgeted direct labor hours	216	134
direct labor cost per hour	$7.00	$7.00
Budgeted direct labor cost	$1,512.00	$938.00

Computation of budgeted manufacturing cost per visor - Shadee Corp.
Particulars	Per Unit
Direct Material	$4.00
Direct labor (0.4*$7)	$2.80
Variable manufacturing overhead	$1.25
Fixed manufacturing overhead	$6.00
Budgeted manufacturing cost per unit	$14.05

Computation of budgeted cost of goods sold - Shadee Corp
Particulars	May	June
Expected sales units	550	320
Manufacturing cost per unit	$14.05	$14.05
Budgeted cost of goods sold	$7,727.50	$4,496.00

Budgeted Selling & Administrative Expenses - Shadee Corp
Particulars	May	June
Budgeted sales	$12,100.00	$7,040.00
Selling cost	$968.00	$563.20
Fixed administrative expenses	$1,600.00	$1,600.00
Budgeted selling & Adminstrative expenses	$2,568.00	$2,163.20