Question
Shadee Corp. expects to sell 590 sun visors in May and 380 in June. Each visor sells for $20. Shadees beginning and ending finished goods
Shadee Corp. expects to sell 590 sun visors in May and 380 in June. Each visor sells for $20. Shadees beginning and ending finished goods inventories for May are 65 and 40 units, respectively. Ending finished goods inventory for June will be 60 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 26 closures on hand on May 1, 19 closures on May 31, and 22 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $700 per month, and variable manufacturing overhead is $1.50 per unit produced.
Required:
1. Determine Shadee's budgeted cost of closures purchased for May and June.
2. Determine Shadee's budget manufacturing overhead for May and June.
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