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 $70. Budgeted unit sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 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 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 pounds of raw materials. The raw materials cost $2.00 per pound. e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $60,000. If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $10 per direct labor-hour, what is the estimated finished goods Inventory balance at the end of July? Ending finished goods inventory $
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 $70. Budgeted unit sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 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 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 pounds of raw materials. The raw materials cost $2.00 per pound. e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $60,000. If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $10 per direct labor-hour, what is the estimated finished goods Inventory balance at the end of July? Ending finished goods inventory $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 $70. Budgeted unit sales for June, July, August, and
September are 8,400, 10,000, 12,000, and 13,000 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 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 pounds of raw materials. The raw
materials cost $2.00 per pound.
e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the
following month.
f. The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct
labor-hours.
g. The variable selling and administrative expense per unit sold is $1.80. The fixed selling and
administrative expense per month is $60,000.
If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $10 per
direct labor-hour, what is the estimated finished goods Inventory balance at the end of July?
Ending finished goods inventory
$
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