Shadee Corp. expects to sell 610 sun visors in May and 440 in June. Each visor sells for $22. Shadee's beginning and ending finished goods inventories for May are 85 and 45 units, respectively. Ending finished goods inventory for June will be 60 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 $2.50 each. Shadee wants to have 35 closures on hand on May 1, 18 closures on May 31, and 23 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,300 per month, and variable manufacturing overhead is $1.50 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. 2. Determine Shadee's budget manufacturing overhead for May and June.

Shadee Corp. expects to sell 610 sun visors in May and 440 in June. Each visor sells for $22. Shadee's beginning and ending finished goods inventories for May are 85 and 45 units, respectively. Ending finished goods inventory for June will be 60 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 $2.50 each. Shadee wants to have 35 closures on hand on May 1, 18 closures on May 31, and 23 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,300 per month, and variable manufacturing overhead is $1.50 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. 2. Determine Shadee's budget manufacturing overhead for May and June.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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