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 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.
Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.
The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours.
The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $60,000.
1. 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?
2. If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $10 per direct labor-hour, what is the estimated cost of goods sold and gross margin for July?
3. If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $10 per direct labor-hour, what is the estimated net operating income for July?
Pounds of raw materials needed to meet production in August | 61000 |
X Ending raw materials inventory percentage | 10% |
X Raw materials cost per pound | 2.00 |
Estimated raw materials inventory balance at the end of July | 12200 |
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...
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 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...
[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 $60. Budgeted unit sales for June, July, August, and September are 9,200, 23,000, 25,000, and 26,000 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...
[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 8,500, 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...
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...
[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...
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: 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...
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 budget: 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. 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...