Shadee Corp. expects to sell 550 sun visors in May and 320 inJune. Each visor sells for $21. Shadee’s beginning and endingfinished goods inventories for May are 60 and 45 units,respectively. Ending finished goods inventory for June will be 60units.
Each visor requires a total of $3.50 in direct materials thatincludes an adjustable closure that the company purchases from asupplier at a cost of $2.00 each. Shadee wants to have 27 closureson hand on May 1, 21 closures on May 31, and 22 closures on June 30and variable manufacturing overhead is $1.75 per unit produced.Suppose that each visor takes 0.70 direct labor hours to produceand Shadee pays its workers $7 per hour. Additional information:Selling costs are expected to be 12 percent of sales. Fixedadministrative expenses per month total $1,600.
1. Required: Complete Shadee's budgeted income statement for themonths of May and June. (Note: Assume that fixed overhead per unitis $3.00.)
