Question

The following informanon applies to the question displayed below Morganton Company makes one product and provided the following information to help teate the master budget The budgeted selling price per unit is $65 Budgeted unt sales for June July August and September are 9.900, 30,00 0.32.000 and 33.000 unts, respectively. All sales are on credit b. Forty percent of credit sales are collected in the month of the sole and 60% in the following month C. The ending finished goods inventory equals 30% of the following month's unit se d. The ending raw materials inventory equals 20% of the following month's raw materials production needs Each unit of fi the goods requires 4 pounds of raw materials. The raw materials cost $250 per pound Forty percent of raw materials purchases are paid for in the month of purchase and 50% in the following month The direct labor wage rates $12 per hour Each unit of finished boods requires two direct labor hours 9. The variable selling and administrative expense per unit sold is $190. The fixed selling and administrative expense per month is $59.000 6 129 200 pounds of For Buy me at is the estimated cost of raw material purchases Dost of raw matanals to be purchased

Answer 1

Production in July = 30000+(32000*30%)-(30000*30%) = 30600 Units

Raw material purchase = (30600*4)+(129200*20%)-(30600*4*20%) = 123760 Pounds

Cost of raw material to be purchased = 123760*2.5 = $309400