1) What is the estimated raw materials inventory balance at the end of July? 2)

Question

1)  What is the estimated raw materials inventory balance at the end of July?

2)  What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced?

3)  If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $11 per direct labor-hour, what is the estimated unit product cost? (Round your answer to 2 decimal places.)

4)  What is the estimated finished goods inventory 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

Solution 1:

Solution 2:

Solution 3:

Solution 4:

Compuation of estimated raw material inventory balance at the end of July Particulars Amount Estimated sales units for August 32000 Ending finished goods inventory for August (33000*30%) 9900 Opneing inventory of finished goods 9600 Production units of august 32300 Raw material requirement per unit (In pound) 4 Raw material requirement for august production 129200 Ending Raw materail inventory at the end of july (20% of August production needs of material) 25840 Raw material cost per pound $2.50 Estimated raw material inventory balance at the end of july $64,600.00

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