Morganton Company makes oneproduct and it provided the following information to help preparethe master budget for its four months of operations:
(a) The budgeted selling price perunit is $70. Budgeted unit sales for June, July, August, andSeptember are 9,100, 22,000, 24,000, and 25,000 units,respectively. All sales are on credit.
(b) Forty-percent of credit sales are collected in the month of thesale and 60% in the following month. (c) The ending finished goods inventory equals 20% of the followingmonth�s unit sales. (d) The ending raw materialsinventory equals 10% of the following month�s raw materialsproduction needs. Each unit of finished goods requires 4 pounds ofraw materials. The raw materials cost $2.50 per pound.
(e) Forty-percent of raw materials purchases are paid for in the monthof purchase and 60% in the following month. (f) The direct labor wage rate is$12 per hour. Each unit of finished goods requires two directlabor-hours.
(g) The variable selling andadministrative expense per unit sold is $1.70. The fixed sellingand administrative expense per month is $61,000.
If 96,800 pounds of raw materials are needed to meet production inAugust, how many pounds of raw materials should be purchased inJuly?
Morganton Company makes oneproduct and it provided the following information to help preparethe master budget for its four months of operations: |
| (a) | The budgeted selling price perunit is $70. Budgeted unit sales for June, July, August, andSeptember are 9,100, 22,000, 24,000, and 25,000 units,respectively. All sales are on credit. |
| (b) | Forty-percent of credit sales are collected in the month of thesale and 60% in the following month. |
| (c) | The ending finished goods inventory equals 20% of the followingmonth�s unit sales. |
| (d) | The ending raw materialsinventory equals 10% of the following month�s raw materialsproduction needs. Each unit of finished goods requires 4 pounds ofraw materials. The raw materials cost $2.50 per pound. |
| (e) | Forty-percent of raw materials purchases are paid for in the monthof purchase and 60% in the following month. |
| (f) | The direct labor wage rate is$12 per hour. Each unit of finished goods requires two directlabor-hours. |
| (g) | The variable selling andadministrative expense per unit sold is $1.70. The fixed sellingand administrative expense per month is $61,000. |
| If 96,800 pounds of raw materials are needed to meet production inAugust, how many pounds of raw materials should be purchased inJuly? |
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