Question
Shadee Corp. expects to sell 610 sun visors in May and 340 in June. Each visor sells for $16. Shadees beginning and ending finished goods
Shadee Corp. expects to sell 610 sun visors in May and 340 in June. Each visor sells for $16. Shadees beginning and ending finished goods inventories for May are 75 and 55 units, respectively. Ending finished goods inventory for June will be 50 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 33 closures on hand on May 1, 15 closures on May 31, and 22 closures on June 30 and variable manufacturing overhead is $1.25 per unit produced. Suppose that each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $9 per hour.
1.Determine Shadees budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $2.00.)
2. Compute the Shadees budgeted cost of goods sold for May and June.
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