Morganton Company manufactures a product and provided the following information to help prepare the master budget for
Question:
Morganton Company manufactures a product and provided the following information to help prepare the master budget for its first four months of operations: |
a. | The budgeted sales price per unit is $65. The 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. | ||||||||
b. | Thirty percent of credit sales are collected in the month of sale and 70% in the following month. | ||||||||
C. | Ending inventory of finished goods equals 30% of unit sales for the following month. | ||||||||
d. | The final inventory of raw materials is equal to 20% of the production needs of raw materials for the following month. Each unit of finished goods requires 4 pounds of raw materials. Raw materials cost $2.50 per pound. | ||||||||
mi. | Twenty-five percent of raw material purchases are paid in the month of purchase and 75% in the following month. | ||||||||
F. | The direct labor wage is $13 per hour. Each unit of finished product requires two hours of direct labor. | ||||||||
gram. | The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $66,000.
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Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen