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 $60. Budgeted unit sales for June, July, August, and September are 9,500, 26,000, 28,000, and 29,000 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 25% of the following monthâs unit sales. d. The ending raw materials inventory equals 15% of the following monthâs raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.40 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 $1.50. The fixed selling and administrative expense per month is $65,000.
Q: What is the estimated net operating income for July, if the company always uses an estimated predetermined plantwide overhead rate of $8 per direct labor-hour?
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 $60. Budgeted unit sales for June, July, August, and September are 9,500, 26,000, 28,000, and 29,000 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 25% of the following monthâs unit sales. d. The ending raw materials inventory equals 15% of the following monthâs raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.40 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 $1.50. The fixed selling and administrative expense per month is $65,000.
Q: What is the estimated net operating income for July, if the company always uses an estimated predetermined plantwide overhead rate of $8 per direct labor-hour?
Related questions
| [The following information applies to the questionsdisplayed below.] |
Morganton Company makes one product and it provided thefollowing information to help prepare the master budget for itsfirst four months of operations: |
| a. | The budgeted selling price per unit is $65. Budgeted unit salesfor 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 thesale and 60% in the following month. |
| c. | Theending finished goods inventory equals 30% of the following monthâsunit sales. |
| d. | The ending raw materials inventory equals 20% of the followingmonthâs raw materials production needs. Each unit of finished goodsrequires 4 pounds of raw materials. The raw materials cost $2.50per pound. |
| e. | Forty percent of raw materials purchases are paid for in themonth of purchase and 60% in the following month. |
| f. | The direct labor wage rate is $12 per hour. Each unit offinished 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. |
Accordingto the production budget, how many units should be produced in Julyand,
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