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.

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.

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.