Questlons 1-15 (of 1)> The following information applies to the questions displa

Question

Questlons 1-15 (of 1)> The following information applies to the questions displayed below Morganton Company makes one product and it provided the following information to help prepare the mester budget for its first four months of operations: a. The budgeted selling pnce per unit is $70.Budgeted unt sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 units, respecively. All sales are on cred b Forty percent of credit sales are collected in the month of the sale and 60% in the following month. c. The ending finished goods inventory equals 20% of the following months unit sales d. The ending raw matenals mentory equals 10% of the folowing month's raw materials production needs Each unit of finished goods requires 5 pounds of raw matenials. The row materials cost $2.00 per pound follow ng e. Thi ty percent of raw materials purchases are R ed for in the month of purchase and 70% in the g The vanable selling and admnistretive expense per unit sold is $1 80. The fixed selling and administrotive expense per month is $60,000 10.00 points O Type here to search 5 6 8 WE R DF GH

Explanation / Answer

13 1 Direct material 10 (5*2) Direct labor 30 (2*15) Predetermined overheads 20 (2*10) Total product cost 60 umber of units sold 10000 Estimated cost of goods sold 600000 2 Estimated sales revenue 700000 (10000*70) Less Estimated cost of goods sold 600000 Estimated gross margin 100000 14 Variable selling and admin expense 18000 (1.8*10000) Fixed selling and admin expense 60000 Total estimated selling and admin expense 78000 15 Estimated gross margin 100000 Less Total estimated selling and admin expense 78000 Net operating income 22000

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