Question

SB Exercise E8-5 to E8-10 [The following information applies to the questions displayed below.] Shadee Corp. expects to sell 500 sun visors in May and 330 in June. Each visor sells for $17. Shadee's beginning and ending finished goods inventories for May are 90 and 60 units, respectively. Ending finished goods inventory for June will be 50 units.

Answer 1

solution 1:

Production Budget - Shadee Corp
Particulars	May	June
Expected sales units	500	330
Add: ending inventory	60	50
Less: Beginning inventory	90	60
Estimated production units of visor	470	320

Budgeted Purchase of cost of closures - Shadee Corp
Particulars	May	June
Budgeted Production units	470	320
Adjustable closure per unit	1	1
Estimated consumption of Adjustable Closures	470	320
Add: ending inventory	15	27
Less: Beginning inventory	33	15
Budgeted purchase units of adjustable closures	452	332
Cost per unit of closures	$2.50	$2.50
Budgeted cost of purchases	$1,130.00	$830.00

Solution 2:

Budgeted manufacturing overhead budget - Shadee Corp
Particulars	May	June
Budgeted Production units	470	320
Variable overhead cost per unit	$1.50	$1.50
Budgeted variable overhead cost	$705.00	$480.00
Budgeted fixed overhead cost	$1,500.00	$1,500.00
Budgeted manufacturing overhead	$2,205.00	$1,980.00

Solution 3:

Budgeted labor cost budget - Shadee Corp
Particulars	May	June
Budgeted Production units	470	320
Direct labor hours per unit	0.30	0.30
Budgeted direct labor hours	141	96
direct labor cost per hour	$7.00	$7.00
Budgeted direct labor cost	$987.00	$672.00