Morganton Company makes one product, and has provided the following information to help prepare themaster budget for its first four months of operations:a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and Septemberare 9,000, 21,000, 23,000, and 24,000 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 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 productionneeds. Each unit of finished goods requires 5 kilograms of raw materials. The raw materials cost $2.70per kilogram.e. Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in thefollowing month.f. The direct labour wage rate is $14 per hour. Each unit of finished goods requires two direct labour-hours.g. The variable selling and administrative expense per unit sold is $1.60. The fixed selling andadministrative expense per month is $60,000.Required:1. What are the budgeted sales for July?Budgeted sales

Sales Budget: The sales budget is the budget prepared to estimate the revenue, the expected number…

Answered: 1. What are the budgeted sales for…

Business

Accounting

1. What are the budgeted sales for July? Budgeted sales

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Cash budget

A cash budget is an estimate of an organization's cash flow for the future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future. If cash receipts are insufficient to cover future expenses, an organization may plan to obtain funds from other sources. After estimating the sales, purchase, and capital expenditure budgets for the year, management develops a cash budget. These budgets are created to ensure that an organization's cash flow is managed. It is important to note that only cash transactions are recorded when actual cash enters and exits an organization.

Question

Morganton Company makes one product, and has 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 $65. Budgeted unit sales for June, July, August, and September
are 9,000, 21,000, 23,000, and 24,000 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 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 finished goods requires 5 kilograms of raw materials. The raw materials cost $2.70
per kilogram.
e. Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in the
following month.
f. The direct labour wage rate is $14 per hour. Each unit of finished goods requires two direct labour-
hours.
g. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and
administrative expense per month is $60,000.
Required:
1. What are the budgeted sales for July?
Budgeted sales

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