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Required information [The following information applies to the questions displayed below.] Morganton Company makes one product and it provided the following information to help prepare
Required information
[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 $70. Budgeted unit sales for June, July, August, and September are 8,500, 16,000, 18,000, and 19,000 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 5 pounds of raw materials. The raw materials cost $2.00 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 $13 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 $66,000.
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