1) If 129,200 pounds of raw materials are needed to meet production in August, h
ID: 2553403 • Letter: 1
Question
1) If 129,200 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July?
2) What is the estimated cost of raw materials purchases for July?
3) In July what are the total estimated cash disbursements for raw materials purchases? Assume the cost of raw material purchases in June is $188,640.
4) What is the estimated accounts payable balance at the end of July?
Morganton Company makes one product and it provided the following information to help prepare the master budget: a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,900, 30,000, 32,000, and 33,000 units, respectively. All sales are on credit. 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 30% of the following month's unit sales. d. The ending raw materials inventory equals 20% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.50 per pound. e. Forty percent of raw materials purchases are paid for in the month of purchase and 60% 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 $1.90. The fixed selling and administrative expense per month is $69,000.Explanation / Answer
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Compuation of estimated raw material purchase for July Particulars Amount Estimated sales units for July 30000 Ending finished goods inventory for July (32000*30%) 9600 Opneing inventory of finished goods 9000 Production units of july 30600 Raw material requirement per unit (In pound) 4 Raw material requirement for July production 122400 Add: Desired ending inventory raw material for July (129200*20%) 25840 Less: Opening inventory of raw material for july 24480 Raw material should be purchased in July (In pound) 123760Related Questions
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