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

1. The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8400, 10,000, 12,000, and 13,000 units. All sales are on credit.
2. 40% of credit sales are collected in the month of the cell and 60% in the following month.
3. Ending finished goods inventory equals 20% of the following month's unit sales.
4. Anything wrong with materials inventory equals 10% of the following month's raw materials production needs. Unit of finished goods requires 5 pounds of raw materials. Raw materials cost two dollars per round.
5. 13% of raw materials purchases I paid for in the month of purchase and 70% in the following month.
6. The direct labor wage rate is $15 per hour. Each unit of finished goods requires to direct labor hours.
7. The variable selling and administrative expense per unit sold are $1.80. Text selling and administrative expense per month are $60,000.

Practice Problems:

Prepare the following budgets for August 1. Sales 2. Schedule of expected cash collections 3. Production 4. Direct materials 5. Schedule of Expected Cash disbursements for purchases of materials 6. What is the estimated accounts payable balance at the end of August? 7. What is the estimated raw material balance at the end of August? 10. Prepare a direct labor budget for August. 11. If we assume that fixed manufacturing overhead cost is $50,000 and variable manufacturing overhead cost is $10.00 per direct labor hour, Prepare a manufacturing overhead budget for August. 12. Prepare a selling and administrative expense budget for August. 13. Compute the unit product cost. Show your calculations. 14. What is the estimated finished goods inventory balance at a cost at the end of August?

FOR THE DIRECT MATERIALS BUDGET, ASSUME THAT THE REQUIRED UNITS IN ENDING INVENTORY FOR AUGUST ARE 6,400 UNITS.