Question

Luchini 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 $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit.

 b. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month.

 c. The ending finished goods inventory equals 10% 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 $5.00 per pound.

 e. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.

 f. The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 dire labor-hours.

 g. Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero.

 If 66,850 pounds of raw materials are required for production in June, then the budgeted raw material purchases for May is closest to:

 A) 52,100 pounds

 B) 72,155 pounds

 C) 87,785 pounds

 D) 56,525 pounds

 If the budgeted cost of raw materials purchases in April is $207,650 and in May is $282,625, then in May the total budgeted cash disbursements for raw materials purchases is closest to:

 A) $124,590

 B) $237,640

 C) $169,575

 D) $113,050

 The estimated finished goods in intermediate calculations to 2 decimal places.) inventory balance at the end of May is closest to: (Round your

 A) $102,676

 B) S111,986

 C) $26,999

 D) $129,675

Answer 1