The following information applies to the questions displayed below Morganton Com

Question

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 for its first four months of operations: a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 8.200, 12.000, 14,000, and 15,000 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 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. e. Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in the following t. g. The variable selling and administrative expense per unit sold is $1.30. The fixed selling and administrative Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound. month. The direct labor wage rate is $13 per hour. Each unit of finished goods requires two direct labor-hours. expense per month is $62,000

Explanation / Answer

11) Unit product cost :

12) Estimated finished goods inventory july = (14000*20%*52) = 145600

13) Cost of goods sold = (12000*52) = 624000

Gross margin = (65-52)*12000 = 156000

14) Total selling and administrative expenses = (12000*1.30+62000) = 77600

15) Net operating income = (156000-77600) = 78400

Direct material (5*2) 10 Direct labour (13*2) 26 Overhead (8*2) 16 Unit product cost 52

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