Question

Shadee Corp. expects to sell 510 sun visors in May and 430 in June. Each visor sells for $17. Shadee’s beginning and ending finished goods inventories for May are 80 and 40 units, respectively. Ending finished goods inventory for June will be 70 units.

Suppose that each visor takes 0.10 direct labor hours to produce and Shadee pays its workers $9 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.)

Answer 1

Solution

	May	June
Total labor cost	$        423	$        414

Working

	May	June
Expected units to be sold	510	430
Add: Desired ending quantity	40	70
Total	550	500
Less: Beginning inventory	80	40
Total units to be produced	470	460
Multoplies by: Hours needed per unit	0.1	0.1
Total hours needed	47	46
Multiplies by: Labor rate per hour	$             9	$             9
Total labor cost	$        423	$        414