50.1K

Verified Solution

Link Copied!

Shadee Corporation expects to sell $630$ sun shades in May and $330$ in June. Each shade sells for $$163.$ Shadee's beginning and ending finished goods inventories for May are $65$ and $55$ shades, respectively. Ending finished goods inventory for June will be $60$ shades.

E$8-10($Algo$)$ Preparing Budgeted Income Statement $[$LO $8-3$h$]$

Each shade requires a total of $$65\mathrm{.}00$ in direct materials that includes $4$ adjustable poles that cost $$10\mathrm{.}00$ each. Shadee expects to have $120$ in direct materials inventory on May $1,100$ poles in inventory on May $31,$ and $100$ poles in inventory on June $30.$

Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $$14$ per hour. Additionally, Shadee's fixed manufacturing overhead is $$9,000$ per month, and variable manufacturing overhead is $$13$ per unit produced.

Additional information:

Selling costs are expected to be $7$ percent of sales.

Fixed administrative expenses per month total $$1,400.$

Required:

Prepare Shadee's budgeted income statement for the months of May and $y.$

Note: Do not round your intermediate calculations. Round your answers to $2$ decimal places.

$\backslash$table$[[$SHADEE CORPORATION$],[$Budgeted Income Statement$],[,$May,June$],[,,],[,,],[,,],[,,],[$Budgeted Gross Margin,,$],[,,],[,,],[,,],[$Budgeted Net Operating Income,,$]]$

Answer & Explanation Solved by verified expert

See Answer