Morganton Company makes one product and it provided the following information to help prepare the master budget:
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Question:
Morganton Company makes one product and it provided the following information to help prepare the master budget:
- The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,600, 27,000, 29,000, and 30,000 units, respectively. All sales are on credit.
- Thirty percent of credit sales are collected in the month of the sale and 70% 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.
- Twenty-five percent of raw materials purchases are paid for in the month of purchase and 75% in the following month.
- The direct labor wage rate is $13 per hour. Each unit of finished goods requires two direct labor-hours.
- The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $66,000.
- What are the budgeted sales for July?
- What are the expected cash collections for July?
- What is the accounts receivable balance at the end of July?
- According to the production budget, how many units should be produced in July?
- If 117,200 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July?
- If 117,200 pounds of raw materials are needed to meet production in August, what is the estimated cost of raw materials purchases for July?
- In July what are the total estimated cash disbursements for raw materials purchases? Assume the cost of raw material purchases in June is $173,760; and 117,200 pounds of raw materials are needed to meet production in August.
- If 117,200 pounds of raw materials are needed to meet production in August, what is the estimated accounts payable balance at the end of July?
- If 117,200 pounds of raw materials are needed to meet production in August, what is the estimated raw materials inventory balance at the end of July?
- 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?
- If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $9 per direct labor-hour, what does the estimated unit product cost?
- If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $9 per direct labor-hour, what is the estimated finished goods inventory balance at the end of July?
- If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $9 per direct labor-hour, what is the estimated cost of goods sold and gross margin for July?
- What is the estimated total selling and administrative expense for July?
- If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $9 per direct labor-hour, what is the estimated net operating income for July?
Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
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