Sevenbergen Corporation makes one product and has provided the following informa

Question

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling prico per unit Budgeted unit sales (all on credit): $ 92 July Auguat September October 9,000 11,300 10,400 10,800 Ra nateriala requirenent por unit of output Rav naterials cost Direct labor requirement per unit of output Direct labor age rate Variable selling and adninistrative expense Fixed selling and administrative expense d pounds $ 1.00 per pound 2.8 direct Labor-hourS $22.00 per direct labor-hour $1.50 pe unit sold 70,000 per month Credit sales are collected 40% in the month of the sale 60% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. The expected cash collections for August is closest to: $912,640 $415,840 $496,800 $828,000

Explanation / Answer

Expected cash collection in august :

August = (9000*92*60%+11300*92*40%) = 912640

so answer is a) $912640

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