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Required information Skip to question [The following information applies to the questions displayed below.] Morganton Company makes one product and it provided the following information
Required informationSkip to question
[The following information applies to the questions displayed below.]
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 8,200, 12,000, 14,000, and 15,000 units, respectively. All sales are on credit.
- Forty percent of credit sales are collected in the month of the sale and 60% in the following month.
- The ending finished goods inventory equals 20% of the following month's unit sales.
- The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound.
- Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in the following month.
- The direct labor wage rate is $13 per hour. Each unit of finished goods requires two direct labor-hours.
- The variable selling and administrative expense per unit sold is $1.30. The fixed selling and administrative expense per month is $62,000.
13. If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $8 per direct labor-hour, what is the estimated cost of goods sold and gross margin for July?
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