Question
Shadee Corp. expects to sell 650 sun visors in May and 430 in June. Each visor sells for $19. Shadees beginning and ending finished goods
Shadee Corp. expects to sell 650 sun visors in May and 430 in June. Each visor sells for $19. Shadees beginning and ending finished goods inventories for May are 80 and 45 units, respectively. Ending finished goods inventory for June will be 70 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 30 closures on hand on May 1, 22 closures on May 31, and 20 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $1,200 per month, and variable manufacturing overhead is $1.50 per unit produced. Each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $8 per hour. Additional information:
- Selling costs are expected to be 8 percent of sales.
- Fixed administrative expenses per month total $1,400.
Required: Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places.)
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