Victoria Inc. makes one product and it provided the following information to help prepare the master budget for its first four months operations: a. The budgeted selling price per unit is $80. Budgeted unit sales for June, July, August, and September are 10,100, 11,100, 13,100, anc 16,100 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 $65,500. Required: What is the estimated cost of raw materials purchases for July? Cost of raw material purchases

Victoria Inc. makes one product and it provided the following information to help prepare the master budget for its first four months operations: a. The budgeted selling price per unit is $80. Budgeted unit sales for June, July, August, and September are 10,100, 11,100, 13,100, anc 16,100 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 $65,500. Required: What is the estimated cost of raw materials purchases for July? Cost of raw material purchases

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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