Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations:
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a.
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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.
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b.
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Thirty percent of credit sales are collected in the month of the sale and 70% in the following month.
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c.
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The ending finished goods inventory equals 25% of the following month's unit sales.
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d.
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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.
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e.
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Thirty five percent of raw materials purchases are paid for in the month of purchase and 65% in the following month.
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f.
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The direct labor wage rate is $14 per hour. Each unit of finished goods requires two direct labor-hours.
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g.
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The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $67,000.
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1.
value:
10.00 points
Required information
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15.
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What is the estimated net operating income for July, if the company always uses an estimated predetermined plantwide overhead rate of $6 per direct labor-hour?
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