Shadee Corp. expects to sell 540 sun visors in May and 390 in June. Each visor sells for $22. Shadee's beginning and ending finished goods inventories for May are 90 and 50 units, respectively. Ending finished goods inventory for June will be 65 units. Each visor requires a total of $3.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 27 closures on hand on May 1, 21 closures on May 31, and 26 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,300 per month, and variable manufacturing overhead is $0.75 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. 2. Determine Shadee's budget manufacturing overhead for May and June.
Shadee Corp. expects to sell 540 sun visors in May and 390 in June. Each visor sells for $22. Shadee's beginning and ending finished goods inventories for May are 90 and 50 units, respectively. Ending finished goods inventory for June will be 65 units. Each visor requires a total of $3.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 27 closures on hand on May 1, 21 closures on May 31, and 26 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,300 per month, and variable manufacturing overhead is $0.75 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. 2. Determine Shadee's budget manufacturing overhead for May and June.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
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