Each visor requires a total of $4.50 in direct materials that includes an adjust
ID: 2582832 • Letter: E
Question
Each visor requires a total of $4.50 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 25 closures on hand on May 1, 17 closures on May 31, and 26 closures on June 30 and variable manufacturing overhead is $2.25 per unit produced. Suppose that each visor takes 0.90 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 $1.60.) (Round your answer to 2 decimal places.)
2. Compute the Shadee’s budgeted cost of goods sold for May and June. (Do not round your intermediate values. Use rounded cost per unit in intermediate calculations.)
Explanation / Answer
BUDGETED COST OF GOODS SOLD
MAY
JUNE
100
102
1645
1677.5
(32.90)
1645
1644.6
1)
BUDGETED COST OF VISOR
DIRECT MATERIAL
$
$
CLOSURE
2.00
OTHER
2.50
4.50
DIRECT LABOUR
.9 X $9
8.10
VARIABLE OVERHEADS
2.25
FIXED OVERHEADS
1.60
TOTAL COST
16.45
BUDGETED COST OF GOODS SOLD
MAY
JUNE
100
102
1645
1677.5
(32.90)
1645
1644.6