Shadee Corp. expects to sell 520 sun visors in May and 310 in June. Each visor s

Question

Shadee Corp. expects to sell 520 sun visors in May and 310 in June. Each visor sells for $26. Shadee’s beginning and ending finished goods inventories for May are 60 and 60 units, respectively. Ending finished goods inventory for June will be 70 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 $1.50 each. Shadee wants to have 26 closures on hand on May 1, 21 closures on May 31, and 27 closures on June 30 and variable manufacturing overhead is $1.75 per unit produced. Suppose that each visor takes 0.70 direct labor hours to produce and Shadee pays its workers $12 per hour.         

Required:
1. Determine Shadee’s budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $1.80.) (Round your answer to 2 decimal places.)

  

2. Compute the Shadee’s budgeted cost of goods sold for May and June. (Do not round your intermediate values. Use rounded cost per unit in intermediate calculations.)

Explanation / Answer

1 Direct materials 5 Direct labor 8.4 =0.7*12 Variable manufacturing overhead 1.75 Fixed overhead 1.8 Budgeted manufacturing cost per visor 16.95 2 May June Expected sales 520 310 Budgeted manufacturing cost per visor 16.95 16.95 Budgeted cost of goods sold 8814.00 5254.50

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