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 550 sun visors in May and 400 in June. Each visor sells for $26. Shadees beginning and ending finished goods inventories for May are 70 and 60 units, respectively. Ending finished goods inventory for June will be 65 units.

E8-5 (Algo) Calculating Sales and Production Budgets [LO 8-3a, b]

Required:

1. Determine Shadee's budgeted total sales for May and June.

2. Determine Shadee's budgeted production in units for May and June.

E8-6 (Algo) Preparing Direct Materials Purchases and Manufacturing Overhead Budgets [LO 8-3c, e]

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 $2.50 each. Shadee wants to have 27 closures on hand on May 1, 19 closures on May 31, and 26 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $1,500 per month, and variable manufacturing overhead is $2.50 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.

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

Suppose that each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $10 per hour.

Required:

Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

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 $2.50 each. Shadee wants to have 27 closures on hand on May 1, 19 closures on May 31, and 26 closures on June 30 and variable manufacturing overhead is $2.50 per unit produced. Suppose that each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $10 per hour.

Required:

1. Determine Shadees budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $5.)

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

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 $2.50 each. Shadee wants to have 27 closures on hand on May 1, 19 closures on May 31, and 26 closures on June 30. Additionally, Shadees fixed manufacturing overhead is $1,500 per month, and variable manufacturing overhead is $2.50 per unit produced. Each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $10 per hour.

Additional information:

• Selling costs are expected to be 12 percent of sales.
• Fixed administrative expenses per month total $1,600.

Required:

Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places.)

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 $2.50 each. Shadee wants to have 27 closures on hand on May 1, 19 closures on May 31, and 26 closures on June 30 and variable manufacturing overhead is $2.50 per unit produced. Suppose that each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $10 per hour.

Additional information:

• Selling costs are expected to be 12 percent of sales.
• Fixed administrative expenses per month total $1,600.

Required:

Complete Shadee's budgeted income statement for the months of May and June. (Note: Assume that fixed overhead per unit is $5.00.) (Do not round your intermediate calculations. Round your answers to 2 decimal places.)