Use these information if needed

Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations:

a.	The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 9,400, 25,000, 27,000, and 28,000 units, respectively. All sales are on credit.
b.	Thirty percent of credit sales are collected in the month of the sale and 70% in the following month.
c.	The ending finished goods inventory equals 20% of the following months unit sales.
d.	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.
e.	Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in the following month.
f.	The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours.
g.	The variable selling and administrative expense per unit sold is $2.00. The fixed selling and administrative expense per month is $64,000.

1) What are the budgeted sales for July?

Budgeted Sales Unit for July = 25,000 Units

Budgeted Selling Price Per Unit = $70

Budgeted Sales in dollars for July = 25,000 Units x $70 = $1,750,000

2) What are the expected cash collections for July?

Expected Cash Collection for July = $985,600

Working Note for Expected Cash Collection:

	June	July	August	September
Budgeted Sales (in Units)	9,400	25,000	27,000	28,000
Budgeted Sale Price Per Unit	$70	$70	$70	$70
Budgeted Credit Sales (In dollars)	$658,000	$1,750,000	$1,890,000	$1,960,000
Collection Schedule
- 30% of credit sales are collected in the month of the sale	$197,400	$525,000	$567,000	$588,000
- 70% of credit sales are collected in the following month of the sale		$460,600	$1,225,000	$1,323,000
Expected Cash Collection		$985,600	$1,792,000	$1,911,000

3) What is the accounts receivable balance at the end of July?

Accounts Receivable Balance at the end of July = 70% of Credit Sales of the July Month

Since 30% of Credit Sales of July Month are collected in the month of sale i.e. July month & 70% of Credit Sales are collected in next month so that this amount will outstand at the end of July.

Accounts Receivable Balance at the end of July = 70% x $1,750,000 = $1,225,000

4) According to the production budget, how many units should be produced in July?

Production Budget
	June	July	August	September
Budgeted Sales (in Units)	9,400	25,000	27,000	28,000
Add: Ending Inventory of Finished Goods (20% of the following months unit sales)	5,000	5,400	5,600	0
Less: Beginning Inventory of Finished Goods (Ending Inventory of previous month)		(5,000)	(5,400)	(5,600)
Production Units		25,400	27,200	22,400

Produced Units in July Month = 25,400 Units

Required information

5.	If 108,800 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July?

6.

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6.	What is the estimated cost of raw materials purchases for July?

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7.	If the cost of raw material purchases in June is $138,080, what are the estimated cash disbursements for raw materials purchases in July?

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8.	What is the estimated accounts payable balance at the end of July?

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9.	What is the estimated raw materials inventory balance at the end of July?

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10.	What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced?

11.

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11.	If the company always uses an estimated predetermined plantwide overhead rate of $10 per direct labor-hour, what is the estimated unit product cost? (Round your answer to 2 decimal places.)