Question
Shadee Corp. expects to sell 590 sun visors in May and 430 in June. Each visor sells for $19. Shadees beginning and ending finished goods
Shadee Corp. expects to sell 590 sun visors in May and 430 in June. Each visor sells for $19. Shadees beginning and ending finished goods inventories for May are 65 and 45 units, respectively. Ending finished goods inventory for June will be 70 units.
Each visor requires a total of $5.50 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 34 closures on hand on May 1, 21 closures on May 31, and 25 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $1,100 per month, and variable manufacturing overhead is $0.75 per unit produced. Each visor takes 0.20 direct labor hours to produce and Shadee pays its workers $6 per hour.
Additional information:
- Selling costs are expected to be 8 percent of sales.
- Fixed administrative expenses per month total $1,500.
Required:
Determine Shadee's budgeted selling and administrative expenses for May and June.
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