Morganton Company makes one product and provided the following information to help prepare its master budget: The
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Morganton Company makes one product and provided the following information to help prepare its master budget:
- The budgeted selling price per unit is $60. Budgeted unit sales for June, July, August, and September are 8,600, 17,000, 19,000, and 20,000 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 25% of the following month's unit sales.
- The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.40 per pound.
- Thirty five percent of raw materials purchases are paid for in the month of purchase and 65% in the following month.
- The direct labor wage rate is $14 per hour. Each unit of finished goods requires two direct labor-hours.
- The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $67,000.
7. In July what are the total estimated cash disbursements for raw materials purchases? Assume the cost of raw material purchases in June is $136,560; and $96,250 pounds of raw materials are needed to meet production in August.
Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
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