Question
Shadee Corp. expects to sell 580 sun visors in May and 330 in June. Each visor sells for $19. Shadees beginning and ending finished goods
Shadee Corp. expects to sell 580 sun visors in May and 330 in June. Each visor sells for $19. Shadees beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 65 units. |
Each visor requires a total of $4.50 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 27 closures on hand on May 1, 18 closures on May 31, and 24 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $800 per month, and variable manufacturing overhead is $1.50 per unit produced.
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