Question

Plz dont make me burn all my question on this ne problem thx

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Morganton Company makes one product and it provided the following information to help prepare the master budget:

1. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,600, 27,000, 29,000, and 30,000 units, respectively. All sales are on credit.
2. Thirty percent of credit sales are collected in the month of the sale and 70% in the following month.
3. The ending finished goods inventory equals 30% of the following month’s unit sales.
4. 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.
5. Twenty five percent of raw materials purchases are paid for in the month of purchase and 75% in the following month.
6. The direct labor wage rate is $13 per hour. Each unit of finished goods requires two direct labor-hours.
7. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $66,000.

5. If 117,200 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 $173,760.

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 we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $9 per direct labor-hour, what is the estimated unit product cost? (Round your answer to 2 decimal places.)

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?

Answer 1

5) Production Units = 27000+(29000*30%)-(27000*30%) = 27600

Raw material purchase = (27600*4) +(117200*20%)-(27600*4*20%) = 111760 Pounds

6) Cost of raw material purchase = 111760*2.5 = $279400

7) Cash disbursement = (173760*75%+279400*25%) = $200170

8) Account payable = 279400*75% = $209550

9) Raw material inventory = 117200*20%*2.5 = $58600

10) Direct labor cost = 27600*2*13 = $717600

11) Unit product cost = (4*2.5)+(13*2)+(9*2) = 54

12) Ending finished goods = 29000*30%*54 = $469800

13) Cost of goods sold = 27000*54 = 1458000

Gross margin = (65-54)*27000 = 297000

14) Selling and administrative expense = (27000*1.6+66000) = 109200

15) Net income = 297000-109200 = 187800