Michard 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 $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. c. The ending finished goods inventory equals 20% 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 4 pounds of raw materials. The raw materials cost $2.00 per pound. e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. The budgeted sales for May is closest to: $1,725,000 $950,000 $1,312,500 $1,612,500

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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  1. Michard 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 $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. 
    b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. 
    c. The ending finished goods inventory equals 20% 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 4 pounds of raw materials. The raw materials cost $2.00 per pound. 
    e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. 
    f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. 
    g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. 

     
    The budgeted sales for May is closest to:
       
    $1,725,000
       
    $950,000
       
    $1,312,500
       
    $1,612,500

     

     

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