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Luchini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: The
Luchini Corporation makes one product and 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 $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit.
- Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month.
- The ending finished goods inventory equals 10% of the following month's sales.
- The ending raw materials inventory equals 30% of the following months raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $5.00 per pound.
- Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.
- The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct labor-hours.
- Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero.
The budgeted accounts receivable balance at the end of May is closest to:
$1,121,100 | ||
$672,660 | ||
$448,440 | ||
$747,000 |
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