FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Required information
[The following information applies to the questions displayed below.]
Morganton Company makes one product and it provided the following information to help prepare the master budget:
a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,000,
21,000, 23,000, and 24,000 units, respectively. All sales are on credit.
b. Thirty percent of credit sales are collected in the month of the sale and 70% 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 5 pounds of raw materials. The raw materials cost $2.70 per pound.
e. Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in the following month.
f. The direct labor wage rate is $14 per hour. Each unit of finished goods requires two direct labor-hours.
g. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per
month is $60,000.
7. In July what are the total estimated cash disbursements for raw materials purchases? Assume the cost of raw material purchases in
June is $194,400; and $116,500 pounds of raw materials are needed to meet production in August.
Total cash disbursements
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Required information
[The following information applies to the questions displayed below.]
Morganton Company makes one product and it provided the following information to help prepare the master budget:
a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,000,
21,000, 23,000, and 24,000 units, respectively. All sales are on credit.
b. Thirty percent of credit sales are collected in the month of the sale and 70% 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 5 pounds of raw materials. The raw materials cost $2.70 per pound.
e. Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in the following month.
f. The direct labor wage rate is $14 per hour. Each unit of finished goods requires two direct labor-hours.
g. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per
month is $60,000.
7. In July what are the total estimated cash disbursements for raw materials purchases? Assume the cost of raw material purchases in
June is $194,400; and $116,500 pounds of raw materials are needed to meet production in August.
Total cash disbursements
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