Asked by Kenya Greene on Apr 29, 2024
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Michard 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 $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit.Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month.The ending finished goods inventory equals 20% 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 4 pounds of raw materials. The raw materials cost $2.00 per pound.Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month.The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours.The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000.The budgeted required production for May is closest to:
A) 11,160 units
B) 13,260 units
C) 15,360 units
D) 10,500 units
Required Production
The quantity of goods a company needs to produce in a specific period to meet its sales goals and inventory requirements.
Budgeted Sales
Budgeted sales refer to the projected amount of sales (in units or revenue) that a company expects to achieve within a certain period, as outlined in its budget.
Credit Sales
Sales transactions in which the purchase amount is charged to the buyer’s account, to be paid at a later date.
- Outline financial strategies for sales achievements, manufacturing outputs, raw material consumption, and labor payments.
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Learning Objectives
- Outline financial strategies for sales achievements, manufacturing outputs, raw material consumption, and labor payments.
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