Question
Shadee Corp. expects to sell 500 sun visors in May and 340 in June. Each visor sells for $25. Shadees beginning and ending finished goods
Shadee Corp. expects to sell 500 sun visors in May and 340 in June. Each visor sells for $25. Shadees beginning and ending finished goods inventories for May are 60 and 55 units, respectively. Ending finished goods inventory for June will be 60 units.
Each visor requires a total of $4.00 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $1.50 each. Shadee wants to have 27 closures on hand on May 1, 17 closures on May 31, and 23 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $1,600 per month, and variable manufacturing overhead is $2.50 per unit produced. Each visor takes 0.80 direct labor hours to produce and Shadee pays its workers $10 per hour. Additional information:
- Selling costs are expected to be 10 percent of sales.
- Fixed administrative expenses per month total $1,200.
Required: Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places.)
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