What is the estimated raw materials inventory balance

Reference no: EM131814009

Question: 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 $65. Budgeted unit sales for June, July, August, and September are 9,900, 30,000, 32,000, and 33,000 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 30% of the following month's unit sales.

d. 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.

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 $1.90. The fixed selling and administrative expense per month is $69,000.

1. What is the estimated raw materials inventory balance (in dollars) at the end of July?

2. 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?

3. If the company always uses an estimated predetermined plant wide overhead rate of $11 per direct labor-hour, what is the estimated unit product cost? (Round your answer to 2 decimal places.)

4. What is the estimated finished goods inventory balance at the end of July, if the company always uses an estimated predetermined plant wide overhead rate of $11 per direct labor-hour?

5. What is the estimated cost of goods sold and gross margin for July, if the company always uses an estimated predetermined plant wide overhead rate of $11 per direct labor-hour?

6. What is the estimated total selling and administrative expense for July?

7. What is the estimated net operating income for July, if the company always uses an estimated predetermined plant wide overhead rate of $11 per direct labor-hour?

Reference no: EM131814009

Questions Cloud

Prepare a variable costing income statement : Montier Corporation produces one product. Its cost includes direct materials ($10 per unit), direct labor ($8 per unit), variable overhead ($5 per unit).

What were the equivalent units for conversion costs : The Morgan Models company manufacturers' replica plastic airplane and motorized vehicle models. During October, the firm's Assembly Department started.

What is the difference between market and government failure : What is the difference between market failure and government failure? What are some of the problems the political system faces in overseeing markets?

Write a page lab report using the scientific method : Write a 1-page lab report using the scientific method centered on the known phenomena of CO2 emissions.

What is the estimated raw materials 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.

Discuss the country a job and transportation : Describe what kind of statement this is and whether it is efficient and feasible in the long run to do based up your knowledge of private property rights.

Discuss product costs under the method of variable costing : What costs are normally included as part of product costs under the method of variable costing

Compute the predetermined overhead rate : At the end of 2011, records show the company incurred $789,080 of actual overhead costs. Determine the predetermined overhead rate for year 2011

Discuss variances management considers important : Management by exception focuses only on those variances management considers important

User Account

All Pages