Morganton Company makes one product and it provided the following information to help prepare the master budget: The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 8,400, 15,000, 17,000, and 18,000 units, respectively. All sales are on credit. Thirty percent of credit sales are collected in the month of the sale and 70% in the following month. The ending finished goods inventory equals 30% of the following month’s unit sales. The ending raw materials inventory equals 20% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.50 per pound. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month. The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $65,000. 10. What is the total estimated direct labor cost for July?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Morganton Company makes one product and it provided the following information to help prepare the
- The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 8,400, 15,000, 17,000, and 18,000 units, respectively. All sales are on credit.
- Thirty percent of credit sales are collected in the month of the sale and 70% in the following month.
- The ending finished goods inventory equals 30% of the following month’s unit sales.
- The ending raw materials inventory equals 20% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.50 per pound.
- Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.
- The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours.
- The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $65,000.
10. What is the total estimated direct labor cost for July?
DITECT LABOUR COST BUDGET
Direct labour Cost Budget helps to estimates the total number Of Direct labour hour Required to produce the Expected Amount of Units
It also Help to Determine the Direct labour Cost required to produced the Estimated number Of Units.
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