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 $60. Budgeted unit sales for June, July, August, and September are 8,600, 17,000, 19,000, and 20,000 units, respectively. All sales are on credit. . 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 25% 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 kilograms of raw materials. The raw materials cost $2.40 per kilogram. e. Thirty five percent of raw materials purchases are paid for in the month of purchase and 65% in the following month. f. The direct labour wage rate is $14 per hour. Each unit of finished goods requires two direct labour-hours. y. The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $67,000. at is the estimated cost of goods sold and gross margin for July? (Round intermediate calculatio al places.) ted cost of goods sold ted gross margin

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
Required information
[The following information applies to the questions displayed below.]
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 $60. Budgeted unit sales for June, July, August, and
September are 8,600, 17,000, 19,000, and 20,000 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 25% 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 kilograms of raw materials. The raw
materials cost $2.40 per kilogram.
e. Thirty five percent of raw materials purchases are paid for in the month of purchase and 65%
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 $1.80. The fixed selling and
administrative expense per month is $67,000.
13. What is the estimated cost of goods sold and gross margin for July? (Round intermediate calculations to 2
decimal places.)
Estimated cost of goods sold
Estimated gross margin
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] 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 $60. Budgeted unit sales for June, July, August, and September are 8,600, 17,000, 19,000, and 20,000 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 25% 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 kilograms of raw materials. The raw materials cost $2.40 per kilogram. e. Thirty five percent of raw materials purchases are paid for in the month of purchase and 65% 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 $1.80. The fixed selling and administrative expense per month is $67,000. 13. What is the estimated cost of goods sold and gross margin for July? (Round intermediate calculations to 2 decimal places.) Estimated cost of goods sold Estimated gross margin
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education