Question

Required information

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Shadee Corp. expects to sell 580 sun visors in May and 310 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 70 and 60 units, respectively. Ending finished goods inventory for June will be 70 units.

Suppose that each visor takes 0.20 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.)

Answer 1

Solution

	May	June
Budgeted Direct labor cost	$    798.00	$        448.00

Working

	May	June
Units to be sold	580	310
Desired Ending Finished Inventory	60	70
Total Units needed	640	380
Less : Beginning Finished Inventory	70	60
Units to be Produced	570	320
Labor hours per unit	0.2	0.2
Total labor hours	114	64
Rate per hour	$        7.00	$            7.00
Budgeted Direct labor cost	$    798.00	$        448.00