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Question - Shadee Corp. expects to sell 530 sun visors in May and 350 in June. Each visor sells for $25. Shadee's beginning and ending finished goods inventories for May are 80 and 50 units, respectively. Ending finished goods inventory for June will be 60 units.
Each visor requires a total of $4.00 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 34 closures on hand on May 1, 20 closures on May 31, and 23 closures on June 30 and variable manufacturing overhead is $2.75 per unit produced. Suppose that each visor takes 0.70 direct labor hours to produce and Shadee pays its workers $9 per hour.
Required -
1. Determine Shadee's budgeted manufacturing cost per visor. (Note: Assume that fixed overhead per unit is $3.)
2. Compute the Shadee's budgeted cost of goods sold for May and June.
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