| The budgeted selling price per unit is $60. Budgeted unit sales for June, July, August, and September are 9,500, 26,000, 28,000, and 29,000 units, respectively. All sales are on credit. | |
| (b) | Forty-percent of credit sales are collected in the month of the sale and 60% in the following month. |
| (c) | The ending finished goods inventory equals 25% of the following month’s unit sales. |
| (d) | The ending raw materials inventory equals 15% of the following month’s raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.40 per pound. |
| (e) | Forty-percent of raw materials purchases are paid for in the month of purchase and 60% in the following month. |
| (f) | The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours. |
| (g) | The variable selling and administrative expense per unit sold is $1.50. The fixed selling and administrative expense per month is $65,000. |
| According to the production budget, how many units should be produced in July? |
| Required production | [removed] units |
5.
value:
10.00 points
Foundational 7-5
| Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations: |
| (a) | The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,300, 24,000, 26,000, and 27,000 units, respectively. All sales are on credit. |
| (b) | Forty-percent of credit sales are collected in the month of the sale and 60% in the following month. |
| (c) | The ending finished goods inventory equals 30% of the following month’s unit sales. |
| (d) | The ending raw materials inventory equals 20% of the following month’s raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.50 per pound. |
| (e) | Thirty-percent of raw materials purchases are paid for in the month of purchase and 70% in the following month. |
| (f) | The direct labor wage rate is $14 per hour. Each unit of finished goods requires two direct labor-hours. |
| (g) | The variable selling and administrative expense per unit sold is $1.90. The fixed selling and administrative expense per month is $63,000. |
| If 105,200 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July? |
| Raw materials to be purchased | [removed] pounds |
6.
value:
10.00 points
Foundational 7-6
| Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations: |
| (a) | The budgeted selling price per unit is $60. Budgeted unit sales for June, July, August, and September are 9,500, 26,000, 28,000, and 29,000 units, respectively. All sales are on credit. |
| (b) | Forty-percent of credit sales are collected in the month of the sale and 60% in the following month. |
| (c) | The ending finished goods inventory equals 25% of the following month’s unit sales. |
| (d) | The ending raw materials inventory equals 15% of the following month’s raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.40 per pound. |
| (e) | Forty-percent of raw materials purchases are paid for in the month of purchase and 60% in the following month. |
| (f) | The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours. |
| (g) | The variable selling and administrative expense per unit sold is $1.50. The fixed selling and administrative expense per month is $65,000. |
