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27 January, 02:13

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 33 closures on hand on May 1, 23 closures on May 31, and 21 closures on June 30 and variable manufacturing overhead is $1.75 per unit produced. Suppose that each visor takes 0.90 direct labor hours to produce and Shadee pays its workers $10 per hour. Additional information: Selling costs are expected to be 8 percent of sales. Fixed administrative expenses per month total $1,200. Required: Complete Shadee's budgeted income statement for the months of May and June. (Note: Assume that fixed overhead per unit is $2.00.) (Do not round your intermediate calculations. Round your answers to 2 decimal places.)

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  1. 27 January, 02:22
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    Check the explanation

    Explanation:

    May June

    Budgeted sales 10800 14400

    (600*18) (800*18)

    Less: cost of good sold 5970 7960

    (9.95*600) (9.95*800)

    Gross margin 4830 6440

    Less: Operating expenses

    Selling expenses (6%*Sales) 648 864

    Fixed administrative expenses 1200 1200

    Total operating expenses 1848 2064

    Budgeted Net Operating Income 2982 4376

    Unit product cost

    Material $4

    Direct labor (9*.3) 2.7

    Variable manuafcturing overhead 1.25

    Fixed overhead 2

    Unit product cost $9.95
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