Question

Morganton Company makes one product and it provided the following information to help prepare the master budget:


Morganton Company makes one product and it provided the following information to help prepare the master budget:

  1. The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 units, respectively. All sales are on credit.

  2. Forty percent of credit sales are collected in the month of the sale and 60% in the following month.

  3. The ending finished goods inventory equals 20% of the following month’s unit sales.

  4. 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 $2.00 per pound.

  5. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.

  6. The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours.

  7. The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $60,000

5. If 61,000 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July?

6. If 61,000 pounds of raw materials are needed to meet production in August, what is the estimated cost of raw materials purchases for July?

7. In July what are the total estimated cash disbursements for raw materials purchases? Assume the cost of raw material purchases in June is $88,880.

8. If 61,000 pounds of raw materials are needed to meet production in August, what is the estimated accounts payable balance at the end of July?

9. If 61,000 pounds of raw materials are needed to meet production in August, what is the estimated raw materials inventory balance at the end of July?

0 0
Add a comment Improve this question Transcribed image text
✔ Recommended Answer
Answer #1

Production July = 10000+(12000*20%)-(10000*20%) = 10400

5) Raw material purchase = (10400*5)+(61000*10%)-(10400*5*10%) = 52900 Pounds

6) Cost of raw material purchase = 52900*2 = $105800

7) Cash disbursement = (88880*70%+105800*30%) = $93956

8) Account payable = 105800*70% = 74060

9) Raw material inventory balance = 6100*2 = $12200

Add a comment
Know the answer?
Add Answer to:
Morganton Company makes one product and it provided the following information to help prepare the master budget:
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • Morganton Company makes one product and it provided the following information to help prepare the master budget:

    Morganton Company makes one product and it provided the following information to help prepare the master budget:The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 units, respectively. All sales are on credit.Forty percent of credit sales are collected in the month of the sale and 60% in the following month.The ending finished goods inventory equals 20% of the following month’s unit sales.The ending raw materials inventory...

  • Morganton Company makes one product and it provided the following information to help prepare the master budget:

     The Foundational 15 [LO8-2, LO8-3, LO8-4, LO8-5, LO8-7, LO8-9, LO8-10] [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 8,400, 10,000, 12,000, and 13,000 units, respectively. All sales are on credit. b. Forty percent of credit sales are collected in the month of the sale and 60% in...

  • Morganton Company makes one product and it provided the following information to help prepare the master...

    Morganton Company makes one product and it provided the following information to help prepare the master budget: The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 units, respectively. All sales are on credit. Forty percent of credit sales are collected in the month of the sale and 60% in the following month. The ending finished goods inventory equals 20% of the following month’s unit sales. The...

  • Morganton Company makes one product and it provided the following information to help prepare the master...

    Morganton Company makes one product and it provided the following information to help prepare the master budget: The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 8,700, 18,000, 20,000, and 21,000 units, respectively. All sales are on credit. Forty percent of credit sales are collected in the month of the sale and 60% in the following month. The ending finished goods inventory equals 30% of the following month’s unit sales. The...

  • Morganton Company makes one product and it provided the following information to help prepare the master...

    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 $60. Budgeted unit sales for June, July, August, and September are 8,000, 11,000, 13,000, and 14,000 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...

  • Morganton Company makes one product and it provided the following information to help prepare the master budget: The bu...

    Morganton Company makes one product and it provided the following information to help prepare the master budget: The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 9,100, 22,000, 24,000, and 25,000 units, respectively. All sales are on credit. Forty percent of credit sales are collected in the month of the sale and 60% in the following month. The ending finished goods inventory equals 20% of the following month’s unit sales. The...

  • Morganton Company makes one product and it provided the following information to help prepare the master...

    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 $65. Budgeted unit sales for June, July, August and Septmeber are 8,400, 15,000, 17,000 and 18,000 units, respectively. All sales are on credit. B) 30% of credit sales are collected in the month of the sale and 70% in the following month. C) The ending finished goods inventory equals 30% of the following month’s unit...

  • Morganton Company makes one product and it provided the following information to help prepare the master...

    Morganton Company makes one product and it provided the following information to help prepare the master budget: The budgeted selling price per unit is $60. Budgeted unit sales for June, July, August, and September are 8,600, 17,000, 19,000, and 20,000 units, respectively. All sales are on credit. Thirty percent of credit sales are collected in the month of the sale and 70% in the following month. The ending finished goods inventory equals 25% of the following month’s unit sales. The...

  • Morganton Company makes one product and it provided the following information to help prepare the master budget:

    [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: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.Thirty percent of credit sales are collected in the month of the sale and 70% in the following month.The ending finished goods inventory equals 20% of the...

  • Morganton Company makes one product and it provided the following information to help prepare the master...

    Morganton Company makes one product and it provided the following information to help prepare the master budget: The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,500, 16,000, 18,000, and 19,000 units, respectively. All sales are on credit. Forty percent of credit sales are collected in the month of the sale and 60% in the following month. The ending finished goods inventory equals 20% of the following month’s unit sales. The...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT