Asked by Briana Quist on Jun 12, 2024
Verified
Luchini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:The budgeted selling price per unit is $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit.Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month.The ending finished goods inventory equals 10% of the following month's sales.The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $5.00 per pound.Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct labor-hours.Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero.If 66,850 pounds of raw materials are required for production in June, then the budgeted raw material purchases for May is closest to:
A) 52,100 pounds
B) 72,155 pounds
C) 87,785 pounds
D) 56,525 pounds
Raw Material Purchases
The acquisition of the basic materials needed for the production of goods, which are typically bought from suppliers and used in the manufacturing process.
Budgeted Sales
The anticipated revenue from goods or services sold, set during the budgeting process for a specific time period.
Credit Sales
Sales made by a business where the customer purchases goods or services on credit and payment is received at a later date.
- Develop financial plans for sales, manufacturing, raw materials, and workforce expenses.
Verified Answer
Learning Objectives
- Develop financial plans for sales, manufacturing, raw materials, and workforce expenses.
Related questions
Sevenbergen Corporation Makes One Product and Has Provided the Following ...
Michard Corporation Makes One Product and It Provided the Following ...
Michard Corporation Makes One Product and It Provided the Following ...
Sevenbergen Corporation Makes One Product and Has Provided the Following ...
Sevenbergen Corporation Makes One Product and Has Provided the Following ...