SB Exercise E8-5 to E8-10

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[The following information applies to the questions displayed below.]

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.

E8-7 (Algo) Preparing Direct Labor Budget [LO 8-3d]

Suppose that each visor takes 0.10 direct labor hours to produce and Shadee pays its workers $9 per hour.

Required:

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

SB Exercise E8-5 to E8-10

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[The following information applies to the questions displayed below.]

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.

E8-8 (Algo) Preparing Cost of Goods Sold Budget [LO 8-3f]

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.

Required:

1. Determine Shadees budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $4.)

2. Compute the Shadees budgeted cost of goods sold for May and June.