Morganton Company makes one product and it provided the following information to

Question

Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations:

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.

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.

The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours.

The variable selling and administrative expense per unit sold is $2.00. The fixed selling and administrative expense per month is $69,000.

Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations:

Explanation / Answer

EXPECTED CASH COLLECTIONS July Aug Sep Quarter June Month sales 431,200 431,200 July month sales 399,000 931000 1,330,000 Aug months sales 441000 1029000 1,470,000 Sep months Sales 462,000 462,000 Total Cash Collections 830,200 1,372,000 1,491,000 3,693,200 Total Cash collections for July month: $ 830,200 Total Cash colections for Quarter: $ 3693,200

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