Required info for 7 & 8: Shadee Corp. expects to sell 600 sun visors in May and

Question

Required info for 7 & 8: Shadee Corp. expects to sell 600 sun visors in May and 800 in June. Each visor sells for $18. Shadees beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 60 units. Each visor requires a total of $4.00 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $1.50 each. Shadee wants to have 30 closures on hand on May 1, 20 closures on May 31, and 25 closures on June 30. Additionally, shadees fixed manifacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.25 per unit produced. Each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $9 per hour.

7. Additional info: selling costs are expected to be 6 percent of sales And fixed administrative expenses per month total $1,200 Required: determine shadees budgeted selling and administrative expenses for May and June.

8. Additional info: selling costs are expected to be 6 percent of sales and fixed administrative expenses per month total $1,200 Required: complete shadees budgeted income statement for the months of May and June. (Note: assume that fixed overhead per unit is $2)
Required info for 7 & 8: Shadee Corp. expects to sell 600 sun visors in May and 800 in June. Each visor sells for $18. Shadees beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 60 units. Each visor requires a total of $4.00 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $1.50 each. Shadee wants to have 30 closures on hand on May 1, 20 closures on May 31, and 25 closures on June 30. Additionally, shadees fixed manifacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.25 per unit produced. Each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $9 per hour.

7. Additional info: selling costs are expected to be 6 percent of sales And fixed administrative expenses per month total $1,200 Required: determine shadees budgeted selling and administrative expenses for May and June.

8. Additional info: selling costs are expected to be 6 percent of sales and fixed administrative expenses per month total $1,200 Required: complete shadees budgeted income statement for the months of May and June. (Note: assume that fixed overhead per unit is $2)
Each visor requires a total of $4.00 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $1.50 each. Shadee wants to have 30 closures on hand on May 1, 20 closures on May 31, and 25 closures on June 30. Additionally, shadees fixed manifacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.25 per unit produced. Each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $9 per hour.

7. Additional info: selling costs are expected to be 6 percent of sales And fixed administrative expenses per month total $1,200 Required: determine shadees budgeted selling and administrative expenses for May and June.

8. Additional info: selling costs are expected to be 6 percent of sales and fixed administrative expenses per month total $1,200 Required: complete shadees budgeted income statement for the months of May and June. (Note: assume that fixed overhead per unit is $2)

Explanation / Answer

Question - 7

Budgeted selling and administrative expenses

Question - 8

BUDGETED INCOME STATEMENT

EXPLANATION

(1) Sales are computed by multiplying 600 units and 800 units sold with $ 18 per visor

(2) Cost of manufacture per visor = Material ( $ 4) + Labor ( $ 2.7 ) + Variable expenses ( 1.25) + Fixed expenses ($ 2 ) = 9.95 per Visor

Hence cost of goods sold = 600 * 9.95 and for June 800 * 9.95

May June Selling cost May = 600 * 18 * 0.06 648 June = 800*18*0.06 864 Fixed administrative cost 1200 1200 Selling and admin Expenses 1848 2064

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