Data for Q3-6 Rokosz Corporation makes one product and it provided the following

Question

Data for Q3-6 Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations A. The budgeted selling price per unit is $104. Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively. All sales are on credit. B. Regarding credit sales, 30% 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 sales. D. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound. E. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.5 direct labor. hours. 3·The expected cash collections for November is closest to: A) $502,320 B) $221,520 C) $723,840 D) $717,600 4. The budgeted required production for November is closest to A)7,940 units B) 10,780 units C) 9,360 units D) 7,100 units 5. If 60,500 pounds of raw materials are required for production in December, then the budgeted cost of raw material purchases for November is closest to: A) $91,880 B) $139,520 C) $79,400 D) $115,700 6. The estimated direct labor cost for November is closest to: A) $320,000 B) $182,620 C) $456,550 D) $19,850

Explanation / Answer

3). Expected cash collection in november = (7100*104*30%+6900*104*70%) = 723840

so answer is c) $723840

4) Production in november = Sales unit+Ending inventory-Beginning inventory

                                       = 7100+(11300*20%)-(7100*20%)

Production in november = 7940 units

so answer is a) 7940 units

5) Budgeted cost of raw material purchases for november = Raw material required for production in month+ending inventory of raw material-beginning inventory of raw material

                                                                   = (7940*5)+(60500*30%)-(7940*5*30%)

                                                                   = 45940 pound*2 per pound

Budgeted cost of raw material purchases for november = 91880

so answer is a) $91880

6) Direct labour cost for november = Production unit*no of hour per unit*rate per hour

                                                  = 7940*2.5*23

Direct labour cost for november = 456550

so answer is c) $456550

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