Morganton Company makes one product and it provided the following information to help prepare the master budget:

a. The budgeted selling price per unit is $77. Budgeted sales units for June, July, August, and September are 9,000, 10,000, 11,000, and 12,000 respectively.

b. Forty percent of credit sales are collected in the month of the sale and 60% 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 5 pounds of raw materials. The raw materials cost $2 per pound.

e. Thirty percent of raw material purchases are paid for in the month of purchase of 70% in the following month.

f. The direct labor wage rate is $15. Each unit of finished goods requires two direct labor-hours.

g. The variable expense per unit is $1.80. The fixed selling and administrative expense is $60,000 of which $10,000 is depreciation expense.

h. A minimum cash balance of $35,000 is required at the end of each month.

i. Assume that the cash balance on July 1 is $40,000.

j. Assume that cost for direct labor, manufacturing overhead, and sales and administration are paid in the month incurred.

k. A capital expenditure in the amount of $50,000 was made on July 30, 2021. if the cash balance falls below the minimum requirement it is covered by borrowing from a line of credit.

• [ Use the answers provided below and the information above from a-k to create a cash budget. ]

original questions and their answers provided:

1. What are the budgeted sales for July? 2. What are the expected cash collections for July? 3. What is the accounts receivable balance at the end of July? 4. According to the production budget, how many units should be produced in July? 5. If 61,800 units of raw material are needed in August, how many pounds of raw material should be purchased in July? 6. What is the estimated cost of raw materials purchases for July? 7. In July, what are the total estimated cash disbursements for raw material purchases if we assume the cost of raw material purchased in June is $93,000? 8. What is the estimated accounts payable balance at the end of July? 9. What is the estimated raw materials inventory balance at the end of July? 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? 11. If we assume that the fixed manufacturing overhead is $250,000 per month of which $50,000 is depreciation expense and the variable rate for manufacturing overhead is $1.74 per direct labor hour, what is the estimated unit cost? 12. What is the estimated finished goods inventory balance at the end of July? 13. What is the estimated cost of goods sold and gross margin for July? 14. What is the estimated total selling and administrative expense for July? 15. What is the estimated net operating income for July? 1. 77.00 x 10,000 770,000 2. 693,000 x. 6 +770,000 x.4 723,800 3. 770,000 x 6 462,000 4. 10,000 +2,200-2,000 10,200 5. 10,200 x 5 +6,180 5,100 52,080 6. 52 080 x 2 104,160 7. 93,000 x .7 + 104,160 x.3 96, 348 8. 104,160 x .7 72,912 9. 6,180 x 2 12,360 10. 10,200 x 2 x 15 306,000 11. Direct material 5 x2 10.00 Direct labor 2 x 15 30.00 Manufacturing overhead 14 x 2 28.00 Unit cost 68.00 12. 2,200 x 68 149,600 13. Cost of sales 10,000 x 68.00 680,000 Gross margin 770,000 - 680,000 90,000 14. Selling and Administration expense: 10,000 x 1.80 + 60,000 78,000 90,000-78,000 12,000 15