Each visor requires a total of $4.50 in direct materials that includes an adjust
ID: 2460258 • Letter: E
Question
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 31 closures on hand on May 1, 17 closures on May 31, and 27 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,600 per month, and variable manufacturing overhead is $2.50 per unit produced.
Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.)
2.
Determine Shadee's budget manufacturing overhead for May and June. (Round your answers to 2 decimal places.)
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Suppose that each visor takes 0.90 direct labor hours to produce and Shadee pays its workers $7 per hour.
Required:
Determine Shadee's budgeted direct labor cost for May and June. (Round your answers to 2 decimal places.)
Explanation / Answer
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 31 closures on hand on May 1, 17 closures on May 31, and 27 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,600 per month, and variable manufacturing overhead is $2.50 per unit produced.
Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.)
May
June
Total
Budgeted production in units
565
320
885
Add: desired ending Inventory
17
27
27
Total Units required
582
347
912
Less: Beginning Inventory
31
17
31
Units to be purchased
551
330
881
Cost per unit
$2.00
$2.00
$2.00
Budgeted purchases in dollars
1,102
660
1,762
Determine Shadee's budget manufacturing overhead for May and June. (Round your answers to 2 decimal places.)
May
June
Total
Budgeted production in units
565
320
885
Variable overhead – per unit
$2.50
$2.50
$2.50
Variable overhead in dollars
$1,412.50
$800.00
$2,212.50
Add: Fixed Overhead per month
$1,600
$1,600
$3,200
Total Manufacturing Overhead cost
$3,012.50
$2,400
$5,412.50
Suppose that each visor takes 0.90 direct labor hours to produce and Shadee pays its workers $7 per hour.
Required:
Determine Shadee's budgeted direct labor cost for May and June. (Round your answers to 2 decimal places.)
May
June
Total
Budgeted production in units
565
320
885
Labour hour – per unit
0.90
0.90
0.90
Total Labor hours required
508.50
288
796.50
Labor hour rate
$7.00
$7.00
$7.00
Direct labor cost in dollars
$3,559.50
$2,016
$5,575.50
May
June
Total
Budgeted production in units
565
320
885
Add: desired ending Inventory
17
27
27
Total Units required
582
347
912
Less: Beginning Inventory
31
17
31
Units to be purchased
551
330
881
Cost per unit
$2.00
$2.00
$2.00
Budgeted purchases in dollars
1,102
660
1,762
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