Check my work Victoria Inc. makes one product and it 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 $80. Budgeted unit sales for June, July, August, and September are 9,700, 10,700, 12,700, and 15,700 units, respectively. All sales are on credit. b. 60% of credit sales are collected in the month of the sale and 40% in the following month. c. The ending finished goods inventory equals 20% of the following month's unit sales. d. The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 5 kg of raw materials. The raw materials cost $2.00 per kilogram e. 30% of raw materials purchases are paid for in the month of purchase and 70% in the following month. f. The direct labour wage rate is $20 per hour. Each unit of finished goods requires two direct labour-hours. g. The variable selling and administrative expense per unit sold is $2.00. The fixed selling and administrative expense per month is $63,500. Required: 62,400 kg of raw materials are needed for production in August, the cost of raw materials purchases in June is $90,280, what are e estimated cash disbursements for raw materials purchases in July? otal cash disbursements
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![Check my work
Victoria Inc. makes one product and it 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 $80. Budgeted unit sales for June, July, August, and September are 9,700, 10,700, 12,700, and
15,700 units, respectively. All sales are on credit.
b. 60% of credit sales are collected in the month of the sale and 40% in the following month.
c. The ending finished goods inventory equals 20% of the following month's unit sales.
d. The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished
goods requires 5 kg of raw materials. The raw materials cost $2.00 per kilogram.
e. 30% of raw materials purchases are paid for in the month of purchase and 70% in the following month.
f. The direct labour wage rate is $20 per hour. Each unit of finished goods requires two direct labour-hours.
g. The variable selling and administrative expense per unit sold is $2.00. The fixed selling and administrative expense per month is
$63,500.
Required:
If 62,400 kg of raw materials are needed for production in August, the cost of raw materials purchases in June is $90,280, what are
the estimated cash disbursements for raw materials purchases in July?
Total cash disbursements](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F25072e3a-f081-4799-91b7-97b41cd5a9df%2F0a509d59-1975-46e2-8674-250a7f0aa70c%2Fw3r2g4o_processed.png&w=3840&q=75)
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