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Mumbower Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted
- Mumbower Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:
Budgeted selling price per unit | $ 103 | |
Budgeted unit sales (all on credit): | ||
October | 9,500 | |
November | 10,700 | |
December | 9,800 | |
January | 10,800 | |
Raw materials requirement per unit of output | 4 | pounds |
Raw materials cost | $ 5.00 | per pound |
Direct labor requirement per unit of output | 2.8 | direct labor-hours |
Direct labor wage rate | $ 19.00 | per direct labor-hour |
Variable selling and administrative expense | $ 1.60 | per unit sold |
Fixed selling and administrative expense | $ 80,000 | per month |
Credit sales are collected: 40% in the month of the sale 60% in the following month
Raw materials purchases are paid: 40% in the month of purchase 60% in the following month
The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 40% of the following months raw materials production needs. Required:
- What are the budgeted sales for November?
- What are the expected cash collections for November?
- What is the budgeted accounts receivable balance at the end of November?
- According to the production budget, how many units should be produced in November?
- If 40,000 pounds of raw materials are needed for production in December, how many pounds of raw materials should be purchased in November?
- What is the estimated cost of raw materials purchases for November?
- If the cost of raw material purchases in October is $201,040, then in November what are the total estimated cash disbursements for raw materials purchases?
- What is the estimated accounts payable balance at the end of November?
- What is the estimated raw materials inventory balance at the end of November?
- What is the total estimated direct labor cost for November assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced?
- For simplicity, we will assume that there is no fixed manufacturing overhead and that the variable manufacturing overhead is $7.00 per direct labor-hour. What is the estimated unit product cost?
- What is the estimated finished goods inventory balance at the end of November?
- What is the estimated cost of goods sold and gross margin for November?
- What is the estimated total selling and administrative expense for November?
- What is the estimated net operating income for November?
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