A) What are the expected cash collections for July? B) . What is the accounts re

Question

A) What are the expected cash collections for July?

B) . What is the accounts receivable balance at the end of July?

C) According to the production budget, how many units should be produced in July?

D) If 106,000 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July?

E) What is the estimated cost of raw materials purchases for July?

F) In July what are the total estimated cash disbursements for raw materials purchases? Assume the cost of raw material purchases in June is $140,352.

G) What is the estimated accounts payable balance at the end of July?

H) What is the estimated raw materials inventory balance at the end of July?

I) 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?

J) If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $10 per direct labor-hour, what is the estimated unit product cost? (Round your answer to 2 decimal places.)

K) . What is the estimated finished goods inventory balance at the end of July?

.L) What is the estimated cost of goods sold and gross margin for July?

M) What is the estimated total selling and administrative expense for July?

N) What is the estimated net operating income for July?

Required informatio [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 8,800, 19,000, 21,000, and 22,000 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 20% of the following month's unit sales. Is production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.40 per pound. e. Twenty five percent of raw materials purchases are paid for in the month of purchase and 75% in the following month f. The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $2.00. The fixed selling and administrative expense per month is $69,000.

Explanation / Answer

Answer A The expected cash collections for July July June Credit Sale Collection $431,200.00 July Credit Sale Collection $399,000.00 Expected Cash collection for July $830,200.00 Answer B The accounts receivable balance at the end of July Sales for July $1,330,000.00 Less : July Sales Collection $399,000.00 Accounts receivable balance at the end of July $931,000.00 Answer C Production Budget for July July Sales units 19000 Add : Ending Inventory for July 4200 Less : Beginning Inventory 3800 No.of units to be produced in July 19400 Answer D Pounds of raw materials should be purchased in July July No.of units to be produced in July 19400 x Pounds of raw material required per unit 5 Total raw material requirement 97000 Add : Ending Raw material inventory 10600 Less : Beginning Raw material Inventory 9700 Pounds of raw materials should be purchased 97900 Answer E The estimated cost of raw materials purchases for July Pounds of raw materials should be purchased 97900 X Cost per pound $2.40 The estimated cost of raw materials purchases for July $234,960.00 Answer F The total estimated cash disbursements for raw materials purchases July Purchases payment $58,740.00 June Purchases Payment $105,264.00 The total estimated cash disbursements for raw materials purchases $164,004.00 Answer G The estimated accounts payable balance at the end of July July Purchases $234,960.00 Less : July Purchases payment $58,740.00 The estimated accounts payable balance at the end of July $176,220.00 Answer H The estimated raw materials inventory balance at the end of July Pounds of raw materials are needed to meet production in August, 106000 X % of following month's production needs 10% The estimated raw materials inventory balance at the end of July 10600 Answer i The total estimated direct labor cost for July Production units for July 19400 x Direct Labour hours required per unit 2 Total Direct Labour hours 38800 X Direct Labour wage rate per hour $12.00 The total estimated direct labor cost for July $465,600.00 Answer J the estimated unit product cost Per Unit Raw Material Cost (5 Pounds * $2.40) $12.00 Direct Labour cost $24.00 Variable manufacturing Overhead (2 DLH * $10) $20.00 Estimated Unit Product Cost $56.00 Answer K The estimated finished goods inventory balance at the end of July Ending Inventory units for July 4200 x Estimated Unit product cost $56.00 The estimated finished goods inventory balance at the end of July $235,200.00 Answer L The estimated cost of goods sold and gross margin for July July Units sold 19000 x Unit product cost $56.00 Cost of goods sold $1,064,000.00 Sales $1,330,000.00 Less : Cost of goods sold $1,064,000.00 Gross Margin $266,000.00 Answer M the estimated total selling and administrative expense for July July Units sold 19000 x Variable Selling and administrative exp.per unit $2.00 Variable selling and administrative cost $38,000.00 Fixed selling and administrative cost $69,000.00 The estimated total selling and administrative expense for July $107,000.00 Answer N The estimated net operating income for July July Gross Margin $266,000.00 Less : Estimated Selling and administrative expense $107,000.00 Estimated Net Operating Income $159,000.00

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