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

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Morganton Company makes one product and it provided the following information to help prepare the master budget: a. The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 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 20% of the following month's unit sales. d. The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished. goods requires 5 pounds of raw materials. The raw materials cost $2.00 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 $15 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 B is $60,000. 9 Required:
Paste 9 1 2 B 4 5 IC E fx F Budgeted sales for July are computed as follows: Unit sales (a) Selling price per unit (b) Budgeted sales (a) x (b) D E C A B 1. What are the budgeted sales for July? G I
C A B 2. What are the expected cash collections for July? = B B = 1 0 1 2 3 4 5 6 7 8 Expected cash collections for July are computed as follows: Collection - month of sales 40% Collection-month after sales 60% July collection June sales collected in July July sales collected in July Total cash collections - July
Paste BI U v V de 121 M F5 X ✓ fx F G E D C A B 13. What is the accounts receivable balance at the end of July? 2 3 July sales (a) 4 Percent uncollected (b) 5 Accounts receivable - July (a) x (b) 6 7 8 9 10 11 12
aste 0 A X ✓ fx C D B E F G A 4. According to the production budget, how many units should be produced in July? Required production for July: July Budgeted sales in units Add: desired ending inventory Total needs Less: beginning inventory Required production 2 3 KD > BIU D H
x ✓ fx C D B F E G H A 5. If 61,000 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July? Raw material purchases for July: July Required production in units Units of raw materials needed per unit Units of raw materials needed to meet production Add: desired units of ending raw materials inventory Total units of raw materials needed Less: Beginning raw materials inventory Units of raw materials to be purchased ! D 1 2 13 14 15 16 17 18.
C 6. What is the estimated cost of raw materials purchases for July? Cost of raw materials purchased for July: Units of raw materials to be purchased - see Q5 (a) Unit cost of raw materials (b) 2 Cost of raw materials to be purchased (a) x (b) 8 9 10 11 12 13 July