Question

In: Accounting

The following information applies to the questions displayed below.] Morganton Company makes one product and it...

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 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 8,000, 11,000, 13,000, and 14,000 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 25% 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 5 pounds of raw materials. The raw materials cost $2.20 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 $12 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $1.20. The fixed selling and administrative expense per month is $61,000.

13. What is the estimated cost of goods sold and gross margin for July, if the company always uses an estimated predetermined plantwide overhead rate of $7 per direct labor-hour? Estimated cost of goods sold ________ estimated gross margin_______

14. What is the estimated total selling and administrative expense for July?

15. What is the estimated net operating income for July, if the company always uses an estimated predetermined plantwide overhead rate of $7 per direct labor-hour? .

Solutions

Expert Solution

Estimated Unit Product Cost
Direct Material per unit (5X2.2) 11.00
Direct labor per unit (2X12) 24.00
Variable Manufacturing overhead (2X7) 14.00
Total Product Cost 49.00
Requirement 13
Estimated Cost of goods of goods sold and gross margin for July
Sales for the month of Jul (11000X60)      6,60,000
Less: Cost of goods Sold (11000X49)     -5,39,000
Gross Margin      1,21,000
Requirement 14
Estimated total selling and administrative expesense for July
Variable selling and administrative expesense (11000X1.20)          13,200
Fixed selling and administrative expesense          61,000
Estimated total selling and administrative expesense for July          74,200
Requirement 15
Estimated net operating income for July
Gross margin      1,21,000
Less :Selling and administrative expesense for July        -74,200
Net operating income          46,800

Related Solutions

[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 8,200, 12,000, 14,000, and 15,000 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...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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: 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. Thirty percent of credit sales are collected in the month of the sale and 70% in the following month. The ending finished goods inventory...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 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 8,000, 11,000, 13,000, and 14,000 units, respectively. All sales are on credit. b. Thirty percent of credit sales are collected in the month of the sale and 70%...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 for its first four months of operations: a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,300, 24,000, 26,000, and 27,000 units, respectively. All sales are on credit. b. Forty percent of credit sales are collected in the month of the sale and 60%...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 for its first four months of operations: a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,300, 24,000, 26,000, and 27,000 units, respectively. All sales are on credit. b. Forty percent of credit sales are collected in the month of the sale and 60%...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 for its first four months of operations: a. 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. b. Thirty percent of credit sales are collected in the month of the sale and 70%...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 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 8,900, 20,000, 22,000, and 23,000 units, respectively. All sales are on credit. b. Forty percent of credit sales are collected in the month of the sale and 60%...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 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 8,900, 20,000, 22,000, and 23,000 units, respectively. All sales are on credit. b. Forty percent of credit sales are collected in the month of the sale and 60%...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 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 8,000, 11,000, 13,000, and 14,000 units, respectively. All sales are on credit. b. Thirty percent of credit sales are collected in the month of the sale and 70%...
[The following information applies to the questions displayed below.] Morganton Company makes one product and it...
[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 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 8,000, 11,000, 13,000, and 14,000 units, respectively. All sales are on credit. b. Thirty percent of credit sales are collected in the month of the sale and 70%...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT