Foundational 7-8 Morganton Company makes one product and it provided the followi

Question

Foundational 7-8 Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations: The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,900, 30,000, 32,000, and 33,000 units, respectively. All sales are on credit. Forty-percent of credit sales are collected in the month of the sale and 60% in the following month. The ending finished goods inventory equals 30% of the following month's unit sales. The ending raw materials inventory equals 20% 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. Forty-percent of raw materials purchases are paid for in the month of purchase and 60% in the following month. The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours. The variable selling and administrative expense per unit sold is $1.90. The fixed selling and administrative expense per month is $69,000.What is the estimated accounts payable balance at the end of July? Accounts payable $

Explanation / Answer

The ending finished goods inventory equals 30% of the following month unit sales. So july unit sales are 30000*30%=9000 closing stock of june . So july production is 21000 units+ 30% for next month32000*30%=9600 So total production is 30600 units.

The ending raw materials inventory equals 20%of the following month raw material production needs.

30600*4*2.5= 306000*60% credit= 183600 July month estimate account payable

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

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