omework Help Seave & Exit Check m Required information The following information
ID: 2548916 • Letter: O
Question
omework Help Seave & Exit Check m Required information The following information applies to the questions displayed below Morganton Company makes one product and it provided the following information to help prepare the mester budget a. The budgeted selling price per unit is $70. Budgeted unit sales for June, July. August, and September are 8.400, 10,000, 12.000, and 13,000 units, respectively. All sales are on credit b. Forty percent of credit sales are collected in the month of the sale and 60% in the flowing month. c. The ending finished goods nventory equals 20% of the following month's unit sales. d. The ending raw materials inventory equals10% o, the following onth's raw matenals production needs Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound e. Thirty percent of raw materals purchases are ped 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 veriable selling and administrative expense per uhit sold is $1.80 The fixed selling and administrative expense per month is $60,000 9 What is the estimated raw materiais inventory balance at the end of July? Badkspace 0Explanation / Answer
Raw material inventory balance at the end of July = Raw material requirement of August x 10 %
Cost of raw material requirement of August =
No of budgeted sales unit x raw material requirement per unit x raw material rate per unit
= 12,000 x 5 x $ 2 = $ 120,000
Raw material inventory balance at the end of July = $ 120,000 x 0.1 = $ 12,000
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