2. Harrington Company makes one product and it 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 $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.

June

July

August

Sep

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 months unit sales.

d. The ending raw materials inventory equals 10% of the following months 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.

Required:

7. If the cost of raw material 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 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?

answer using template & formulas

Part 1 July Sales Units Selling Price Total Sales Part 2 July Collections June Sales July Sales Cash Collections Part 3 AR Balance July Sales AR Balance Part 4 July Production Budgeted units Ending Inventory Total Needs Beginning inventory Required Production Part 5 Raw Material for July Required Production Units of raw material Units of raw material needed Ending Inventory Units of raw material needed beginning inventory raw material to be purchased Part 6 Cost of raw material raw material to be purchased Cost Cost of raw material purchased Part 7 Cash disbursements for materials June Purchases July Purchases Total cash disbursements Part 8 Accounts Payable July July Purchases Part 9 Ending Raw Materials Ending Raw Material Balance Cost Raw Material Inventory Bal. Part 11 Estimated Unit Product Cost Quantity Cost Total Part 10 Direct Labor Cost Required Production in Units Direct Labor Hours per unit Direct labor hours needed Direct labor cost per hour Total direct labor cost Direct Materials Direct Labor Manufacturing OH Unit Product Cost Part 12 Finished Good Inventory Bal. July Ending Finished Goods Units Unit Product cost Ending Finished Goods Inventory Part 13 COGS July Unit Sales Unit product cost Estimated COGS Part 14 S&A Expenses July Budgeted Units Variable S& A Total Variable Expense Fixed S&A Total S&A Part 15 Estimated GM Total S&A Net Operating Income Total Sales Estimated COGS Estimated GM