1. Petrini Corporation makes one product and it provided the following informati
ID: 2530267 • Letter: 1
Question
1. Petrini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:
The budgeted selling price per unit is $110. Budgeted unit sales for January, February, March, and April are 7,500, 10,600, 12,000, and 11,700 units, respectively. All sales are on credit.
Regarding credit sales, 30% 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 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 $4.00 per pound.
Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.
The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours.
Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour.
The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $70,000.
The expected cash collections for February is closest to:
$577,500
$927,300
$349,800
$825,000
2. Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:
Credit sales are collected:
30% in the month of the sale
70% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month’s raw materials production needs.
The estimated finished goods inventory balance at the end of November is closest to:
$44,388
$117,957
$101,517
$145,905
Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): October 9,600 November 10,100 December 13,700 January 11,300Explanation / Answer
Req 1 Answer is $ 927,300 Explanation: SALES BUDGET Jan Feb March QUARTER Budgeted Sales units 7,500 10,600 12,000 30,100 Selling price per unit 110 110 110 110 Total Sales 825,000 1,166,000 1,320,000 3,311,000 Expected Cash collections in the month of Feb: Collections of Jan month sales (70% of 825000) 577500 Collections of Feb month sales (30% of 1166,000) 349800 Expected Cash collections in the month of Feb: 927300 Rreq 2: Answer is $ 145,905 Explanation: Finished Goods Inventory in units in Nov end (13700Units 10%) 1370 units Unit Product cost: Material (3 pounds @ 4) 12 Labour (2.7 hours @23) 62.1 Variable OH (2.7 hours @ 12) 32.4 106.5 Total Valuation of Ending Inventory of Finished Goods in Nov end 145905
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