Shadee Corp. expects to sell 550 sun visors in May and 450 in June. Each visor sells for $26. Shadee’s beginning and ending finished goods inventories for May are 75 and 45 units, respectively. Ending finished goods inventory for June will be 55 units. Each visor requires a total of $3.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.50 each. Shadee wants to have 27 closures on hand on May 1, 17 closures on May 31, and 21 closures on June 30 and variable manufacturing overhead is $0.75 per unit produced. Suppose that each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $10 per hour. Required: 1. Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $7.) 2. Compute the Shadee’s budgeted cost of goods sold for May and June.
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Shadee Corp. expects to sell 550 sun visors in May and 450 in June. Each visor sells for $26. Shadee’s beginning and ending finished goods inventories for May are 75 and 45 units, respectively. Ending finished goods inventory for June will be 55 units.
Each visor requires a total of $3.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.50 each. Shadee wants to have 27 closures on hand on May 1, 17 closures on May 31, and 21 closures on June 30 and variable manufacturing
Required:
1. Determine Shadee’s budgeted
2. Compute the Shadee’s budgeted cost of goods sold for May and June.
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