Shadee Corp. expects to sell 610 sun visors in May and 390 in June. Each visor s

Question

Shadee Corp. expects to sell 610 sun visors in May and 390 in June. Each visor sells for $20. Shadee’s beginning and ending finished goods inventories for May are 80 and 55 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 $2.50 each. Shadee wants to have 34 closures on hand on May 1, 19 closures on May 31, and 28 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $900 per month, and variable manufacturing overhead is $1.00 per unit produced. Each visor takes 0.90 direct labor hours to produce and Shadee pays its workers $7 per hour. Additional information: Selling costs are expected to be 6 percent of sales. Fixed administrative expenses per month total $1,500. Required: Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places.)

Explanation / Answer

selling and administrative expenses :

6 % of (610 units * $20 per unit)

732

6% of (390 *20)

468

may june selling expenses

6 % of (610 units * $20 per unit)

732

6% of (390 *20)

468

administrative exp. 1500 1500 selling and administrative exp. $ 2232 $1968

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