Required information

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Shadee Corp. expects to sell 590 sun visors in May and 420 in June. Each visor sells for $21. Shadees beginning and ending finished goods inventories for May are 75 and 60 units, respectively. Ending finished goods inventory for June will be 55 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 $2.50 each. Shadee wants to have 25 closures on hand on May 1, 18 closures on May 31, and 26 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.20 direct labor hours to produce and Shadee pays its workers $7 per hour.

Required:

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

2. Compute the Shadees budgeted cost of goods sold for May and June.