[The following information applies to the questions displayed below.] Shadee Cor

Question

[The following information applies to the questions displayed below.] Shadee Corp. expects to sell 560 sun visors in May and 330 in June. Each visor sells for $19. Shadee's beginning and ending finished goods inventories for May are 80 and 45 units, respectively. Ending finished goods inventory for June will be 50 units. value: 10.00 points Required information 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 34 closures on hand on May 1, 20 closures on May 31, and 22 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,200 per month, and variable manufacturing overhead is $1.75 per unit produced. Required 1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.) May June Budgeted Cost of Closures Purchased

Explanation / Answer

Particulars

May

June

Sold

560

330

Add: Ending Inventory

45

50

Total Requirement

605

380

Less: Beginning Inventory

-80

-45

Production

525

335

Particulars

May

June

Production Requirement

1750
[525*5/1.5]

1116.67
[335*5/1.5]

Add: Closing Inventory

20

22

Total Requirement

1770

1138.67

Less: Beginning Inventory

34

20

Total Purchases of Direct Material

1736

1118.67

Cost of each Direct Material

1.5

1.5

Budgeted cost of closures purchased

2604

1678

Particulars

May

June

Sold

560

330

Add: Ending Inventory

45

50

Total Requirement

605

380

Less: Beginning Inventory

-80

-45

Production

525

335

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