Question

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 $60. Budgeted unit sales for June, July, August, and September are 9,200, 23,000, 25,000, and 26,000 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 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 pounds of raw materials. The raw materials cost $2.50 per pound. e. Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $13 per hour. Each unit of finished goods requires two direct labor-hours. g. The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $62,000. 4. According to the production budget, how many units should be produced in July? Required production units

Answer 1

Answer-4)- According the production budget, units should be produced in July = 23400 units.

Explanation-

MORGANTON COMPANY
Production Budget
For the month of July
Particulars		July
		Units
Budgeted sales		23000
Add:- Closing Inventory		25000*20%=5000
20% of Following month sale
Less:- Opening Inventory		23000*20%=4600
No. of units to be produced		23400