Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Morganton Company makes one product and it provided the following information to help prepare the master budget: The budgeted selling price per unit is $65.
Morganton Company makes one product and it provided the following information to help prepare the master budget:
- The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 8,400, 15,000, 17,000, and 18,000 units, respectively. All sales are on credit.
- Thirty percent of credit sales are collected in the month of the sale and 70% in the following month.
- The ending finished goods inventory equals 30% of the following month's unit sales.
- The ending raw materials inventory equals 20% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.50 per pound.
- Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.
- The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours.
- The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $65,000.
4. According to the production budget, how many units should be produced in 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