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Required information Skip to question [The following information applies to the questions displayed below.] Morganton Company makes one product and provided the following information to
Required information
Skip to question
[The following information applies to the questions displayed below.]
Morganton Company makes one product and provided the following information to help prepare its master budget:
- 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.
- 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 months unit sales.
- 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.
- Forty percent of raw materials purchases are paid for in the month of purchase and 60% 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 $1.70. The fixed selling and administrative expense per month is $61,000.
2. What are the expected cash collections for July?
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