Question: morganton company makes one product and it provided the following...
Morganton Company makes one product and it provided the following information to help prepare the master budget:
- The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,200, 13,000, 15,000, and 16,000 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 equals 20% of the following month’s unit sales.
- 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 $2.50 per pound.
- Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.
- The direct labor wage rate is $14 per hour. Each unit of finished goods requires two direct labor-hours.
- The variable selling and administrative expense per unit sold is $1.40. The fixed selling and administrative expense per month is $63,000.
5. If 76,000 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July?