Question
Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations: (a) The
Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations: |
(a) | The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 9,100, 22,000, 24,000, and 25,000 units, respectively. All sales are on credit. |
(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 4 pounds of raw materials. The raw materials cost $2.50 per pound. |
(e) | Forty-percent of raw materials purchases are paid for in the month of purchase and 60% in the following month. |
(f) | The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours. |
(g) | The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $61,000. |
If 96,800 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July? |
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