Shadee Corp. expects to sell 600 sun visors in May and 340 in June. Each visor sells for $20. Shadees beginning and ending finished goods inventories for May are 80 and 55 units, respectively. Ending finished goods inventory for June will be 50 units.

E8-6 (Algo) Preparing Direct Materials Purchases and Manufacturing Overhead Budgets [LO 8-3c, e]

Each visor requires a total of $5.00 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, 22 closures on May 31, and 28 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $1,100 per month, and variable manufacturing overhead is $2.00 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.