[The following information applies to the questions displayed below.] 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 $65. Budgeted unit sales for June, July, August, and September are 8,400, 15,000, 17,000, and 18,000 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 pounds of raw materials. The raw materials cost $2.50 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 $12 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $65,000. 10. What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced? Total direct labor cost
[The following information applies to the questions displayed below.] 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 $65. Budgeted unit sales for June, July, August, and September are 8,400, 15,000, 17,000, and 18,000 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 pounds of raw materials. The raw materials cost $2.50 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 $12 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $65,000. 10. What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced? Total direct labor cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Budgeting and Cost Analysis for Morganton Company**
Morganton Company specializes in a single product and has provided the following data for preparing a master budget:
1. **Budgeted Sales and Selling Price:**
- Selling price per unit: $65
- Budgeted unit sales for:
- June: 8,400 units
- July: 15,000 units
- August: 17,000 units
- September: 18,000 units
- All sales are made on credit.
2. **Collection of Credit Sales:**
- 30% of sales are collected in the same month.
- 70% are collected in the following month.
3. **Inventory Policies:**
- Ending finished goods inventory is 30% of the next month’s sales.
- Ending raw materials inventory equals 20% of the following month’s production needs.
- Each unit of finished goods requires 5 pounds of raw materials, which cost $2.50 per pound.
4. **Payment for Raw Materials:**
- 30% of raw materials are paid in the purchase month.
- 70% are paid the following month.
5. **Labor and Administrative Costs:**
- Direct labor wage rate is $12 per hour.
- Each finished unit requires 2 direct labor-hours.
- Variable selling and administrative expense is $1.60 per unit sold.
- Fixed selling and administrative expenses are $65,000 per month.
**Problem:**
For July, calculate the total estimated direct labor cost assuming the workforce is adjusted to match production hours.
**Solution:**
- **Total direct labor cost** (to be input): _______
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