Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Morganton Company makes one product, and has provided the following information to help prepare the master budget for its first four months of operations: The
Morganton Company makes one product, and has provided the following information to help prepare the master budget for its first four months of operations:
- 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.
- Forty percent of credit sales are collected in the month of the sale and 60% in the following month.
- The ending finished goods inventory equals 20% of the following months unit sales.
- The ending raw materials inventory equals 10% of the following months raw materials production needs. Each unit of finished goods requires 5 kilograms of raw materials. The raw materials cost $2.00 per kilogram.
- Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.
- The direct labour wage rate is $15 per hour. Each unit of finished goods requires two direct labour-hours.
- The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $60,000.
Required: 1. What are the budgeted sales for July?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started