[The following information applies to the questions displayed below] Morganton C

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[The following information applies to the questions displayed below] Morganton Company makes one product and It provided the following information to help prepare the master budget for Its first four months of operations: a. The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 9700, 28,000, 30,000, and 31,000 units, respectively. All sales are on credit Forty percent C. The ending finished goods inventory equals 20% of the following month's unit sales. d. The ending raw materials inventory equals 10% of the following month's raw materials production needs. of credit sales are collected in the month of the sale and 60% in the following month h unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.50 per pound. e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month t. The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours. 9 The vartable selling and administrative expense per unit sold is $170. The fixed selling and administrative expense per month is $67,000

Explanation / Answer

8)

8)Accounts payable at end of july = july purchase* % of unpaid amount

          = 285800 .70 = 200060

9)Raw material at end of july : August production need *% of ending inventory*rate per pound

                         =120800*.10*2.5

                         = $ 30200

**unit produced in august = 30000+[31000*.20]-[30000*.20] = 30200

raw material consumption in production= 30200* 4 = 120800

10)Direct labor cost = unit produced in july *hours per unit *rate per hour

          = 28400*2*15

            = $ 852000

11)

June July unit sales 9700 28000 ending finished goods desired 28000*.20= 5600 30000*.20= 6000 Beginning Finished goods inventory (1940) (5600) Unit produced 13360 28400 requirement of raw material per unit 4 4 Material consumed 53440    [13360*4] 113600 desired ending inventory 11360    [113600*.10] 12080     [30200*4=120800*.10] less:beginning raw material (5344) (11360) raw material purchased 59456 114320 cost of material purchased 59456*2.5= 148640 285800

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