SB Exercise E8-5 to E8-10

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Shadee Corp. expects to sell 500 sun visors in May and 320 in June. Each visor sells for $15. Shadees beginning and ending finished goods inventories for May are 75 and 55 units, respectively. Ending finished goods inventory for June will be 65 units.

E8-9 (Algo) Preparing Selling and Administrative Expense Budget [LO 8-3g]

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 29 closures on hand on May 1, 18 closures on May 31, and 21 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $800 per month, and variable manufacturing overhead is $1.00 per unit produced. Each visor takes 0.10 direct labor hours to produce and Shadee pays its workers $9 per hour.

Additional information:

• Selling costs are expected to be 12 percent of sales.
• Fixed administrative expenses per month total $1,100.

Required:

Determine Shadee's budgeted selling and administrative expenses for May and June.

E8-10 (Algo) Preparing Budgeted Income Statement [LO 8-3h]

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 29 closures on hand on May 1, 18 closures on May 31, and 21 closures on June 30 and variable manufacturing overhead is $1.00 per unit produced. Suppose that each visor takes 0.10 direct labor hours to produce and Shadee pays its workers $9 per hour.

Additional information:

• Selling costs are expected to be 12 percent of sales.
• Fixed administrative expenses per month total $1,100.

Required:

Complete Shadee's budgeted income statement for the months of May and June. (Note: Assume that fixed overhead per unit is $4.00.) (Do not round your intermediate calculations. Round your answers to 2 decimal places.)

E8-11 (Algo) Calculating Cash Receipts [LO 8-4]

Shadee Corp. expects to sell 600 sun visors in May and 320 in June. Each visor sells for $16. Shadees beginning and ending finished goods inventories for May are 80 and 60 units, respectively. Ending finished goods inventory for June will be 55 units.

It expects the following unit sales for the third quarter:

July	545
August	450
September	430

Sixty percent of Shadees sales are cash. Of the credit sales, 54 percent is collected in the month of the sale, 38 percent is collected during the following month, and 8 percent is never collected.

Required:

Calculate Shadees total cash receipts for August and September.