Question
Shadee Corp. expects to sell 560 sun visors in May and 380 in June. Each visor sells for $24. Shadees beginning and ending finished goods
Shadee Corp. expects to sell 560 sun visors in May and 380 in June. Each visor sells for $24. Shadees beginning and ending finished goods inventories for May are 75 and 40 units, respectively. Ending finished goods inventory for June will be 65 units.
Each visor requires a total of $3.50 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 34 closures on hand on May 1, 17 closures on May 31, and 20 closures on June 30 and variable manufacturing overhead is $1.50 per unit produced. Suppose that each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $12 per hour.
Required:
1. Determine Shadees budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $4.)
2. Compute the Shadees budgeted cost of goods sold for May and June.
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