Required information The following information applies to the questions displaye

Question

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, O units, respectively. All sales are on cr 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

Explanation / Answer

10) Total Direct Labor Cost for July = Units To be Produced in July 20,350 Units x 2 DLHs per unit x $12 per hour

= 20350*2*12

= $488,400

11) Unit Product Cost = Direct material cost per unit + Direct labor Cost per unit + Variable Manufacturing Overhead per unit

= (5 Pounds x $2.40) + (2 DLHs x $12) + (2 DLHs x $10)

= $12 + $24 + 20

= $46 per unit

Unit Product Cost = $46 per unit

12) Estimated Finished Goods Inventory balance at the end of July (Refer Primary Working) = 4,200 Units

13) Estimated Cost of Goods sold and gross margin for july

Estimated Cost of Goods Sold = Units Sold in July 19,000 Units x Unit Product Cost as calculated in Part 11 $46 per unit

= 19,000*46

= $874,000

Gross Margin = July Sales – July Cost of Goods Sold

= (19000*70) - $874,000

= $1,330,000 - $874,000

= $456,000

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Pls ask separate question for remaining parts.

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