Question
Shadee Corp. expects to sell 640 sun visors in May and 440 in June. Each visor sells for $22. Shadees beginning and ending finished goods
Shadee Corp. expects to sell 640 sun visors in May and 440 in June. Each visor sells for $22. Shadees beginning and ending finished goods inventories for May are 75 and 45 units, respectively. Ending finished goods inventory for June will be 70 units.
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 33 closures on hand on May 1, 16 closures on May 31, and 24 closures on June 30 and variable manufacturing overhead is $2.00 per unit produced. Suppose that each visor takes 0.40 direct labor hours to produce and Shadee pays its workers $9 per hour.
Required:
1. Determine Shadees budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $4.)
2. Compute the Shadees budgeted cost of goods sold for May.
3. Compute the Shadees budgeted cost of goods sold for June.
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