Shadee Corp. expects to sell 580 sun visors in May and 330 in June. Each visor sells for $19. Shadee’s beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 65 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 $1.50 each. Shadee wants to have 30 closures on hand on May 1, 20 closures on May 31, and 25 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.25 per unit produced. Each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $9 per hour.
| Shadee Corp. expects to sell 580 sun visors in May and 330 in June. Each visor sells for $19. Shadee’s beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 65 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 $1.50 each. Shadee wants to have 30 closures on hand on May 1, 20 closures on May 31, and 25 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,000 per month, and variable manufacturing overhead is $1.25 per unit produced. Each visor takes 0.30 direct labor hours to produce and Shadee pays its workers $9 per hour. | | • | Selling costs are expected to be 8 percent of sales. | | • | Fixed administrative expenses per month total $1,200. | | Required: | | Determine Shadee\'s budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations.) | |
Calculation of the budgeted Selling & Admin expenses May June No of visors 580 330 Selling price 19 19 Total sales 11020 6270 Selling Expenses 881.6 501.6 8% of sales Fixed Administrative Expenses 1200 1200
Homework Sourse