Shadee Corp. expects to sell 520 sun visors in May and 300 in June. Each visor s

Question

Shadee Corp. expects to sell 520 sun visors in May and 300 in June. Each visor sells for $19. Shadee’s beginning and ending finished goods inventories for May are 70 and 60 units, respectively. Ending finished goods inventory for June will be 60 units.

E8-7 Preparing Direct Labor Budget [LO 8-3d]

Suppose that each visor takes 0.50 direct labor hours to produce and Shadee pays its workers $9 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.)

May June Budgeted Direct Labor Cost

Explanation / Answer

Determine Shadee's budgeted direct labor cost for May and June.

May June Sales units 520 300 Add: Desired ending inventory 60 60 Less: Beginning inventory (70) (60) Production units 510 300 Labour hour per unit 0.50 0.50 Labour hour for production 255 150 Rate per hour 9 9 Budgeted Direct Labor Cost 2295 1350

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