Morganton 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 $60. Budgeted unit sales for June, July, August, and September are 9,200, 23,000, 25,000, and 26,000 units, respectively. All sales are on credit.
b.	Thirty percent of credit sales are collected in the month of the sale and 70% 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 4 pounds of raw materials. The raw materials cost $2.50 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 $13 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 $62,000.

9.	What is the estimated raw materials inventory balance at the end of July?

References

eBook & Resources

WorksheetLearning Objective: 08-03 Prepare a production budget.Learning Objective: 08-07 Prepare a selling and administrative expense budget.

Difficulty: 2 MediumLearning Objective: 08-04 Prepare a direct materials budget, including a schedule of expected cash disbursements for purchases of materials.Learning Objective: 08-09 Prepare a budgeted income statement.

Learning Objective: 08-02 Prepare a sales budget, including a schedule of expected cash collections.Learning Objective: 08-05 Prepare a direct labor budget.Learning Objective: 08-10 Prepare a budgeted balance sheet.

Check my work

10.

value: 0.66 points

Required information

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?

References

eBook & Resources

WorksheetLearning Objective: 08-03 Prepare a production budget.Learning Objective: 08-07 Prepare a selling and administrative expense budget.

Difficulty: 2 MediumLearning Objective: 08-04 Prepare a direct materials budget, including a schedule of expected cash disbursements for purchases of materials.Learning Objective: 08-09 Prepare a budgeted income statement.

Learning Objective: 08-02 Prepare a sales budget, including a schedule of expected cash collections.Learning Objective: 08-05 Prepare a direct labor budget.Learning Objective: 08-10 Prepare a budgeted balance sheet.

Check my work

11.

value: 0.66 points

Required information

11.	If the company always uses an estimated predetermined plantwide overhead rate of $8 per direct labor-hour, what is the estimated unit product cost? (Round your answer to 2 decimal places.)

References

eBook & Resources

WorksheetLearning Objective: 08-03 Prepare a production budget.Learning Objective: 08-07 Prepare a selling and administrative expense budget.

Difficulty: 2 MediumLearning Objective: 08-04 Prepare a direct materials budget, including a schedule of expected cash disbursements for purchases of materials.Learning Objective: 08-09 Prepare a budgeted income statement.

Learning Objective: 08-02 Prepare a sales budget, including a schedule of expected cash collections.Learning Objective: 08-05 Prepare a direct labor budget.Learning Objective: 08-10 Prepare a budgeted balance sheet.

Check my work

12.

value: 0.66 points

Required information

12.	What is the estimated finished goods inventory balance at the end of July, if the company always uses an estimated predetermined plantwide overhead rate of $8 per direct labor-hour?

References

eBook & Resources

WorksheetLearning Objective: 08-03 Prepare a production budget.Learning Objective: 08-07 Prepare a selling and administrative expense budget.

Difficulty: 2 MediumLearning Objective: 08-04 Prepare a direct materials budget, including a schedule of expected cash disbursements for purchases of materials.Learning Objective: 08-09 Prepare a budgeted income statement.

Learning Objective: 08-02 Prepare a sales budget, including a schedule of expected cash collections.Learning Objective: 08-05 Prepare a direct labor budget.Learning Objective: 08-10 Prepare a budgeted balance sheet.

Check my work

13.

value: 0.66 points

Required information

13.	What is the estimated cost of goods sold and gross margin for July, if the company always uses an estimated predetermined plantwide overhead rate of $8 per direct labor-hour?

References

eBook & Resources

WorksheetLearning Objective: 08-03 Prepare a production budget.Learning Objective: 08-07 Prepare a selling and administrative expense budget.

Difficulty: 2 MediumLearning Objective: 08-04 Prepare a direct materials budget, including a schedule of expected cash disbursements for purchases of materials.Learning Objective: 08-09 Prepare a budgeted income statement.

Learning Objective: 08-02 Prepare a sales budget, including a schedule of expected cash collections.Learning Objective: 08-05 Prepare a direct labor budget.Learning Objective: 08-10 Prepare a budgeted balance sheet.

Check my work

14.

value: 0.66 points

Required information

14.	What is the estimated total selling and administrative expense for July?

References

eBook & Resources

WorksheetLearning Objective: 08-03 Prepare a production budget.Learning Objective: 08-07 Prepare a selling and administrative expense budget.

Difficulty: 2 MediumLearning Objective: 08-04 Prepare a direct materials budget, including a schedule of expected cash disbursements for purchases of materials.Learning Objective: 08-09 Prepare a budgeted income statement.

Learning Objective: 08-02 Prepare a sales budget, including a schedule of expected cash collections.Learning Objective: 08-05 Prepare a direct labor budget.Learning Objective: 08-10 Prepare a budgeted balance sheet.

Check my work

15.

value: 0.76 points

Required information

15.	What is the estimated net operating income for July, if the company always uses an estimated predetermined plantwide overhead rate of $8 per direct labor-hour?