Shadee Corporation expects to sell 520 sun shades in May and 410 in June. Each shade sells for $160. Shadees beginning and ending finished goods inventories for May are 90 and 50 shades, respectively. Ending finished goods inventory for June will be 65 shades.

E8-7 (Algo) Preparing Direct Labor and Manufacturing Overhead Budgets [LO 8-3d]

Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $13 per hour. Additionally, Shadees fixed manufacturing overhead is $12,000 per month, and variable manufacturing overhead is $13 per unit produced.

Required:

Prepare Shadees direct labor budget for May and June.

Prepare Shadees manufacturing overhead budget for May and June.