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Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:

Budgeted selling price per unit $ 118
Budgeted unit sales (all on credit):
April 7,800
May 9,400
June 14,000
July 12,100

Raw materials requirement per unit of output 3 pounds
Raw materials cost $ 3.00 per pound
Direct labor requirement per unit of output 2.8 direct labor-hours
Direct labor wage rate $ 25.00 per direct labor-hour

Credit sales are collected:

40% in the month of the sale

60% in the following month

The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following months raw materials production needs.

If 39,720 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

Multiple Choice

  • $145,224

  • $124,992

  • $101,160

  • $104,760

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