Reference no: EM132510118

Laney Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:

1. The budgeted selling price per unit is $87.
2. Budgeted unit sales for January, February, March, and April are 7,100, 8,300, 13,700, and 13,600 units, respectively. 
3. All sales are on credit. 
4. The credit sales are collected as follows: 20% in the month of the sale and 80% in the following month. 
5. Craney wants the ending finished goods inventory to equal 40% of the following month's unit sales. 
6. Craney wants the ending direct materials inventory to equal 40% of the following month's direct materials production needs. 
7. Each unit of finished goods requires 5 pounds of material. 
8. The raw materials cost $1.00 per pound. 
9. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. 
10. Each unit of finished goods requires 2.7 direct labor-hours. 
11. The direct labor wage rate is $19.00 per hour.

Question a. What are the budgeted sales for February?

Question b. What are the expected cash collections for February?

Question c. According to the production budget, how many units should be produced in February?

Question d. If 68,300 pounds of direct materials are needed for production in March, how many pounds of direct materials should be purchased in February?

Question e. What is the estimated cost of direct materials purchases for February?

Question f. If the cost of direct material purchases in January is $43,660, then in February what are the estimated cash disbursements for direct materials purchases?

Question g. What is the total estimated direct labor cost for February?