Required information The Foundational 15 [LO8-2, LO8-3, LO8-4, LO8-5, LO8-7, LO8

Question

Required information The Foundational 15 [LO8-2, LO8-3, LO8-4, LO8-5, LO8-7, LO8-9, LO8-1o] [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 a. The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 9,700, 28,000, 30,000, and 31,000 units, respectively. All sales are on credit. D. Forty percent of credit sales are collected in the month of the sale and 60% in the following month. 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. Each 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 f. The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours. g. The varlable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $67,000 Foundational 8-9 9. What is the estimated raw materials inventory balance at the end of July? Raw material invent balance 10. What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced? Total direct labor cost

Explanation / Answer

9.

Production in August = August sales + 20% of September sales - 20% of August sales

= 30,000 + (31,000*20%) - (30,000*20%)

= 30,000 + 6,200 - 6,000

= 30,200

Raw material production needs in August = 30,200 units * 4 pounds of raw material = 120,800

Raw material inventory balance at the end of July = 10% of August months production needs

= 120,800*10%

= 12,080

10.

Production in july = July sales + 20% of August sales - 20% of July sales

= 28,000 + (30,000*20%) - (28,000*20%)

= 28,000 + 6,000 - 5,600

= 28,400

Total direct labour cost for July = 28,400 units * 2 hours per unit * 15 per hour

= 852,000

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

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