SB Exercise E8-5 to E8-10

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Shadee Corporation expects to sell 550 sun shades in May and 390 in June. Each shade sells for $162. Shadees beginning and ending finished goods inventories for May are 80 and 45 shades, respectively. Ending finished goods inventory for June will be 55 shades.

E8-7 (Algo) Preparing Direct Labor and Manufacturing Overhead Budgets [LO 8-3d]

Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $14 per hour. Additionally, Shadees fixed manufacturing overhead is $10,000 per month, and variable manufacturing overhead is $14 per unit produced.

Required:

1. Prepare Shadees direct labor budget for May and June.
2. Prepare Shadees manufacturing overhead budget for May and June.