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E8-7 (Algo) Preparing Direct Labor and Manufacturing Overhead Budgets [LO 8-3d] Shadee Corporation expects to...

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Accounting

E8-7 (Algo) Preparing Direct Labor and Manufacturing Overhead Budgets [LO 8-3d]

Shadee Corporation expects to sell 500 sun shades in May and 370 in June. Each shade sells for $142. Shadees beginning and ending finished goods inventories for May are 65 and 55 shades, respectively. Ending finished goods inventory for June will be 70 shades. Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $12 per hour. Additionally, Shadees fixed manufacturing overhead is $8,000 per month, and variable manufacturing overhead is $11 per unit produced.

Required:

  1. Prepare Shadees direct labor budget for May and June.
  2. Prepare Shadees manufacturing overhead budget for May and June.
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