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 $60. Budgeted unit sales for June, July, August, and
September are 8,600, 17,000, 19,000, and 20,000 units,
respectively. All sales are on credit. b. Thirty-percent of credit
sales are collected in the month of the sale nd 70% 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 10% of the following month's raw materials cost
$2.40 per pound. e. Thirty five-percent of raw materials purchases
are paid for in the month of purchse and 65% 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 $1.80. The
fixed selling and administrative expense per month is $67,000.
Required: 5. If 96,250 pounds of raw materials are needed to meet
production in August, how many pounds of raw materials should be
purchased in July? 6. What is the estimated cost of raw materials
purchases for July? 7. In July what are the total estimated cash
disbursements for raw materials purchases? Assume the cost of raw
material purchases in June is $136,560. 8. What is the estimated
accounts payable balance at the end of July? 9. What is the
estimated raw materials inventory balance at the end of July? 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. If the company
always uses an estimated predetermined plantwide overhead rate of
$6 per direct labor-hour, what is the estimated unit product cost?
12. What is the estimated finished goods inventory balance at the
end of July? 13. What is the estimated cost of goods sold and gross
margin for July? 14. What is the estimated total selling and
administrative expense for July? 15. What is the estimated net
operating income for July?
