Question

Shadee Corp. expects to sell 600 sun visors in May and 330 in June. Each visor sells for $23. Shadee’s beginning and ending finished goods inventories for May are 70 and 45 units, respectively. Ending finished goods inventory for June will be 65 units.

Each visor requires a total of $5.00 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 35 closures on hand on May 1, 17 closures on May 31, and 24 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $900 per month, and variable manufacturing overhead is $2.00 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.

Answer 1

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