Morganton Company makes one product and it provided the following information to

Question

Morganton Company makes one product and it provided the following information to help prepare the master budget: a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,000, 21,000, 23,000, and 24,000 units, respectively. All sales are on credit. b. Thirty percent of credit sales are collected in the month of the sale and 70% in the following month. C. The ending finished goods inventory equals 30% of the following month's unit sales. d. The ending raw materials inventory equals 20% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The e. Twenty percent of raw materials purchases are paid for in the month of purchase and f. The direct labor wage rate is $14 per hour. Each unit of finished goods requires two g. The variable selling and administrative expense per unit sold is $1.60. The fixed selling raw materials cost $2.70 per pound 80% in the following month. direct labor-hours. and administrative expense per month is $60,000.

Explanation / Answer

July Month Production units: July budgeted sales 21000 Add: Desired ending inventory 6900 Total requirement 27900 Less: Desired beginning Inventory 6300 July month budgeted production units 21600 Req 5. Raw material to be purchased in July: Pproduction requirement of July 21600 Raw material required per unit 5 Total Production requirement 108,000 Add: Desired ending raw material 23,300 Total requirement 131,300 Less: Dsired beginning inventory 21,600 Total Raw material to be purchased 109,700 Req 6. Cash disbursement in July June montht purchases (194400*80%) 155,520 July month purchases (109700*20%) 21,940 Cash disbursement in July 177,460

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.