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Morganton Company_Budgeting

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Question;Morganton;Company makes one product and it provided the following information to help;prepare the master budget for its four months of operation;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 and selling;administrative expense per unit sold is $1.80. The fixed selling and;administrative expense per month is $60,000.;1. What are the budgeted;sales for July?;2. What are the expected cash;collections for July?;3. What is the accounts;receivable balance at the end of July?;4. According to the;production budget, how many units should be produced in July?;5. If 61,000 pounds of raw;materials are needed to meet production in August, how many pounds of raw;materials should be purchased in July?;6. What is the estimated cost;of raw materials purchases for July?;7. If the cost of raw;materials purchases in June is $88,880, what are the estimated cash;disbursements for raw materials purchases in July?;8. What is the estimated;accounts payable balance at the end of July?;9. What is the estimated raw;materials inventory balance at the end of July?;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?;11. If the company always uses;an estimated predetermined plant wide overhead rate of $10 per direct labor;hour, what is the estimated unit product cost?;12. What is the estimated;finished goods inventory balance at the end of July, if the company always uses;an estimated predetermined plant wide overhead rate of $10 per direct labor;hour?;13. What is the estimated cost;of goods sold and gross margin for July, if the company always uses an;estimated predetermined plant wide overhead rate of $10 per direct labor hour?;14. What is the estimated;total selling and administrative expenses for July?;15. What is the estimated net;operating income for July, if the company always uses an estimated;predetermined plant wide overhead rate of $10 per direct labor-hour?

 

Paper#37321 | Written in 18-Jul-2015

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