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Avalanche Co. is a manufacturer that makes one product.It provided the following information to help prepare the master budget for the next four months of
Avalanche Co. is a manufacturer that makes one product.It provided the following information to help prepare the master budget for the next four months of operations:
- The budgeted selling price per unit is $48.Budgeted unit sales for May, June, July, and August are 81,300;85,000;82,800;and 80,000 units, respectively.All sales are on credit.
- The ending finished goods inventory equals 30% of the following month's sales.
- The ending raw materials inventory equals 20% of the following month's raw materials production needs.
- Each unit of finished goods requires 5 ounces of raw materials. The raw materials cost $1.60 per ounce.
- The direct labor wage rate is $20.00 per hour. Each unit of finished goods requires 0.75 direct labor-hours.
- Variable manufacturing overhead is $8.00 per direct labor-hour. Fixed manufacturing overhead is zero.
The estimated finished goods inventory balance at the end of June is closest to:
a.$696,000
b.$720,360
c.$707,310
d.$739,500
e.$674,720
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