Thirty-percent of credit sales


Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations:

(a)The budgeted selling price per unit is $60. Budgeted unit sales for June, July, August, and September are 8,600, 17,000, 19,000, and 20,000 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 25% 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 5 pounds of raw materials. The raw materials cost $2.40 per pound.

(e) Thirty five-percent of raw materials purchases are paid for in the month of purchase and 65% in the following month.

(f)The direct labor wage rate is $14 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 $67,000.

What are the budgeted sales for July?

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Accounting Basics: Thirty-percent of credit sales
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