Question

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 a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,900, 30,00 0, 32,000, and 33,000 units, respectively. All sales are on credit. b. Forty percent of credit sales are collected in the month of the sale and 60% in the following month. c. The ending finished goods inventory equals 30% of the following month's unit sales. d. The ending raw materials inventory equals 20 % of the following month's raw materials production needs. Each unit of fi nished goods requires 4 pounds of raw materials. The raw materials cost $2.50 per pound. e. Forty percent of raw materials purchases are paid for in the month of purchase and 60% in the following month. f. The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $1.90. The fixed selling and administrative expense per month is $69,000. 8. If 129,200 pounds of raw materials are needed to meet production in August, what is the estimated accounts payable balance at the end of July? Accounts payable

Answer 1

1d)		production budget
					july			august
	Expected sale units				30,000			32000
	Add:Desired ending inventory				9600			9900
	total needs				39,600			41900
	less:Desired beginning inventory				9000			-9600
	units to be produced				30,600	answer		32300
1e)					july			August
	units to be produced				30,600			32300
	pounds per unit				4			4
	total pounds required				122,400			129200
	Add:Desired ending iventory				25840
	total pounds required				148,240
	less:beginning inventory				24,480
	Raw materials required				123,760	answer
	cost per unit				2.5
	total cost of materials				309400
	therefore accounts payable 309400*60%=				74256	answer