Required information The following information applies to the questions displaye
ID: 2558024 • Letter: R
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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: a. The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,800 19,000, 21,000, and 22,000 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 20% of the following month's unit sales. d. 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 $2.40 per pound. e. Twenty five percent of raw materials purchases are paid for in the month of purchase and 75% în 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 $2.00. The fixed selling and administrative expense per month is $69,000. Required: 1. What are the budgeted sales for July? Budgeted salesExplanation / Answer
1)Budgeted sales for july =unit sales for july *price
= 19000*70
= $ 1,330,000
2)Total cash collection for july = [June sales * % collection ]+ [July sales *% collection]
=[8800*70*.70]+[1330000*.30]
= 431200+ 399000
= 830200
3)Accounts receivable at end:July sales *% of uncollection
1330000*.70
= 931000
4)Units to produced in july = unit sales in july +desired ending units of finished goods -beginning units of FG
19000+ [21000*.20]-[19000*.20]
19000+4200-3800
19400 UNITS
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