Reference no: EM132844034

Northbare Company makes 1 product, and has provided the following information to help prepare the master budget for its first 4 months of operations:

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 kilograms of raw materials. The raw materials cost $2.50 per kilogram.
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 labour wage rate is $13 per hour. Each unit of finished goods requires two direct labour-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.

Problem 1: What are the expected cash collections for July?

Problem 2: What is the accounts receivable balance at the end of July?

Problem 3: What is the estimated raw materials inventory balance at the end of July?

Problem 4: What is the total estimated direct labour cost for July assuming the direct labour workforce is adjusted to match the hours required to produce the forecast number of units produced?

Problem 5: If the company always uses an estimated predetermined plantwide overhead rate of $9 per direct labour-hour, what is the estimated unit product cost? (Round your answer to 2 decimal places.)

Problem 6: What is the estimated finished goods inventory balance at the end of July? (Round intermediate calculations to 2 decimal places.)

Problem 7: What is the estimated cost of goods sold and gross margin for July? (Round intermediate calculations to 2 decimal places.)

Problem 8: What is the estimated total selling and administrative expense for July?

Problem 9: What is the estimated operating income for July?