What is the estimated finished goods inventory balance

Assignment Help Financial Accounting

Reference no: EM131296135

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 9,500, 26,000, 28,000, and 29,000 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 25% of the following month’s unit sales.

d. The ending raw materials inventory equals 15% of the following month’s raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.40 per pound.

e. Forty percent of raw materials purchases are paid for in the month of purchase and 60% in the following month.

f. The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours.

g. The variable selling and administrative expense per unit sold is $1.50. The fixed selling and administrative expense per month is $65,00

1. What is the estimated raw materials inventory balance at the end of July?

raw material inventory balence

2. What is the estimated finished goods inventory balance at the end of July, if the company always uses an estimated predetermined plantwide overhead rate of $8 per direct labor-hour?

ending finished goods inventory

Reference no: EM131296135

Questions Cloud

Compute the amount of the cost of goods sold : The following information for 2016 is available for Marino Company: Compute the cost of the ending inventory before the physical inventory is taken. Ignore Sales allowances in your computations. Compute the amount of the cost of goods sold that came ..

Determine the amount to withhold for federal income tax : Use the appropriate table to determine the amount to withhold for federal income tax from each of the following biweekly wages (biweekly withholding allowance = $153.80):

Is the result in the adjusted trial balance debit or credit : The end of period spreadsheet is useful in preparing an Adjusted Trial Balance from which the three Financial Statements can be prepared. Please indicate the results in the adjusted Trial Balance under the following circumstances. An account has a de..

Describe process whereby owners control firm management : Who owns a corporation? Describe the process whereby the owners control the firm’s management. Describe the main reason why an agency relationship exists in the corporate form of organization. In this context, describe the types of problems that can ..

What is the estimated finished goods inventory balance : Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations: What is the estimated raw materials inventory balance at the end of July? What is the estimated f..

Discuss risk associated with being over or under-leveraged : If you were a small business owner would you implement an activity-based costing system. What potential benefits or pitfalls do you foresee? Discuss the risk associated with being over or under-leveraged.

A basic assumption of the cost-volume-profit model : A basic assumption of the cost-volume-profit model is that

The best way to reduce operating leverage is to : The best way to reduce operating leverage is to

Operating leverage is best described : Operating leverage is best described as

User Account

All Pages