2. 4.00 points Required information E8-6 Preparing Raw Materials Purchases and M
ID: 2539571 • Letter: 2
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2. 4.00 points Required information E8-6 Preparing Raw Materials Purchases and Manufacturing Overhead Budgets (LO 8-3c, e Each visor requires a total of $3.5 have 35 closures on hand on May manufacturing overhead is $2.00 er at a cost of $2.00 each. Shadee wants to g overhead is $1,400 per month, and variable Required Information SB Exercise E8-5 to E8-10 Required 1. Determine Shadee's budgeted The following information applies to the questions displayed below) Budgeted Cost of Closures Purcha Shadee Corp expects to sell 640 sun visors in May and 420 in June. Each visor sells for $15. Shadee's beginning and ending finished goods inventories for May are 80 and 55 units, respectively. Ending finished goods inventory for June will be 70 units answers to 2 decimal places 2. Determine Shadee's budgot ma Budgeted Manufacturing Overhead ReferencesExplanation / Answer
1. Visors produced in the month of May = closing stock at the end of May+sales – opening stock = 55+640-80 = 615
No. of closures required for May = 615*1 = 615. Thus visors to be purchased = no. of visors required – opening stock+closing stock = 615-35+17 = 597 closures
Cost of closures purchased = 597 closures*$2 = $1,194
Visors required in the month of June = closing stock at the end of June+sales – opening stock =70+420-55 = 435
No. of closures required for June = 435*1 = 435. Thus visors to be purchased = no. of visors required – opening stock+closing stock = 435-17+26 = 444
Cost of closures purchased = 444 closures*$2 = $888
2. Variable overhead for May = 615*$2 = $1,230. Thus total overhead for May = variable+fixed = 1230+1400 = 2630
Variable overhead for June = 435*2 = 870. Total overhead for June = 870+1400 = 2270
May June Budgeted cost of closures purchased 1,194.00 888.00Related Questions
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