Shadee Corp. expects to sell 550 sun visors in May and 380 in June. Each visor s

Question

Shadee Corp. expects to sell 550 sun visors in May and 380 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 65 and 40 units, respectively. Ending finished goods inventory for June will be 65 units.

Suppose that each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $8 per hour.

Required:
Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Explanation / Answer

May June Expected sales 550 380 Add: Ending finished goods inventory 40 65 Total needs 590 445 Less: Beginning finished goods inventory 65 40 Required production 525 405 Direct labor hours per unit 0.3 0.3 Total direct labor hours 157.5 121.5 Direct labor cost per hour 8 8 Budgeted direct labor cost 1260 972

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