Required information [The following information applies to the questions displayed below.] Morganton Company makes one product, and has 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 $70. Budgeted unit sales for June, July, August, and September are 9,700, 28,000, 30,000, and 31,000 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 20% of the following month's unit sales. d. The ending raw materials inventory equals 10% 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. e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month. f. The direct labour wage rate is $15 per hour. Each unit of finished goods requires two direct labour-hours. g. The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $67,000. 12. What is the estimated finished goods inventory balance at the end of July? (Round intermediate calculations to 2 decimal places.) Ending finished goods inventory
Required information [The following information applies to the questions displayed below.] Morganton Company makes one product, and has 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 $70. Budgeted unit sales for June, July, August, and September are 9,700, 28,000, 30,000, and 31,000 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 20% of the following month's unit sales. d. The ending raw materials inventory equals 10% 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. e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month. f. The direct labour wage rate is $15 per hour. Each unit of finished goods requires two direct labour-hours. g. The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $67,000. 12. What is the estimated finished goods inventory balance at the end of July? (Round intermediate calculations to 2 decimal places.) Ending finished goods inventory
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
![Required information
[The following information applies to the questions displayed below.]
Morganton Company makes one product, and has 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 $70. Budgeted unit sales for June, July, August, and September are 9,700,
28,000, 30,000, and 31,000 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 20% of the following month's unit sales.
d. The ending raw materials inventory equals 10% 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.
e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.
f. The direct labour wage rate is $15 per hour. Each unit of finished goods requires two direct labour-hours.
g. The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per
month is $67,000.
12. What is the estimated finished goods inventory balance at the end of July? (Round intermediate calculations to 2 decimal places.)
Ending finished goods inventory](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F152b40bd-7086-45ce-9589-15ab08f2c62e%2Fe0891c45-e725-4bee-a786-5d57751b4e85%2Fge7fv3m_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Morganton Company makes one product, and has 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 $70. Budgeted unit sales for June, July, August, and September are 9,700,
28,000, 30,000, and 31,000 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 20% of the following month's unit sales.
d. The ending raw materials inventory equals 10% 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.
e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.
f. The direct labour wage rate is $15 per hour. Each unit of finished goods requires two direct labour-hours.
g. The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per
month is $67,000.
12. What is the estimated finished goods inventory balance at the end of July? (Round intermediate calculations to 2 decimal places.)
Ending finished goods inventory
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