17 Required information [The following information applies to the questions disp

Question

17 Required information [The following information applies to the questions displayed below. Morganton Company makes one product and it provided the following information to help prepare the master budget: Part 15 of 15 10 points a. The budgeted selling price per unit is $60. Budgeted unit sales for June, July, August, and September are 8,000, 11,000, 13,000, and 14,000 units, respectively. All sales are on credit. b. Thirty percent of credit sales are collected in the month of the sale and 70% in the following month C. The ending finished goods inventory equals 25% of the following month's unit sales. d. The ending raw materials inventory e Skipped quals 10% of the following month's raw materials production needs. Each unit of eBook finished goods requires 5 pounds of raw materials. The raw materials cost $2.20 per pound. e. Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in the following month. f. The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $1.20. The fixed selling and administrative expense per Print References month is $61,000. 15. What is the estimated net operating income for July? Net operating income

Explanation / Answer

Net operating Income = 200,800

Particulars workings Amount Amount Sales 11000 units * 60 660000 (-) Variable cost Materials 11000 Units * 5 pounds * 2.20 121000 Wages 11000 Units * 2 hours * 12 264000 Variable selling expenses 11000 Units * 1.20 13200 Total variable cost 398200 Contribution Total sales - Total variable cost 261800 (-) Fixed cost given 61000 Net operating Income Contribution - fixed cost 200800

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