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 $65. Budgeted unit sales for June, July, August, and September are 9,900, 30,00 0,32,000, and 33,000 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 30% of the following month's unit sales. d. The ending raw materials inventory equals 20% of the following month's raw materials production needs. Each unit of fi nished goods requires 4 pounds of raw materials. The raw materials cost $2.50 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 $1.90. The fixed selling and administrative expense per month is $69,000. 8. If 129,200 pounds of raw materials are needed to meet production in August, what is the estimated accounts payable balance at the end of July? Accounts payable

Answer 1

8
Accounts payable	185640
Workings:
Budgeted sales for July	30000
Add: Desired ending inventory	9600	=32000*30%
Less: Beginning inventory	-9000	=30000*30%
Budgeted production	30600
Budgeted production	30600
X Pounds per unit	4
Materials required for production	122400
Add: Desired ending inventory	25840	=129200*20%
Less: Beginning inventory	-24480	=122400*20%
Budgeted purchases in pounds	123760
X Cost per pound	2.50
Budgeted raw materials purchases	309400
Budgeted raw materials purchases	309400
X Percentage unpaid	60%
Accounts payable	185640