Determine budgeted cost of closures purchased

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Reference no: EM131294256

Shadee Corp. expects to sell 540 sun visors in May and 370 in June. Each visor sells for $21. Shadee’s beginning and ending finished goods inventories for May are 75 and 40 units, respectively. Ending finished goods inventory for June will be 50 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 $2.50 each. Shadee wants to have 27 closures on hand on May 1, 21 closures on May 31, and 20 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $800 per month, and variable manufacturing overhead is $2.50 per unit produced.

1. Determine Shadee's budgeted cost of closures purchased for May and June

2. Determine Shadee's budget manufacturing overhead for May and June

Suppose that each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $9 per hour.

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

Reference no: EM131294256

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