Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations:a.The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,300, 24,000, 26,000, and 27,000 units, respectively. All sales are on credit.b.Forty percent of credit sales are collected in the month of the sale and 60% in the following month.c.The ending finished goods inventory equals 30% of the following month’s unit sales.d.The ending raw materials inventory equals 20% of the following month’s raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.50 per pound.e.Thirty percent of raw materials purchases are paid for in the month of purchase and 70% 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 $1.90. The fixed selling and administrative expense per month is $63,000.2. What are the expected cash collections for July?3. What is the accounts receivable balance at the end of July?4. According to the production budget, how many units should be produced in July?5. If 105,200 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July?6. What is the estimated cost of raw materials purchases for July?7. If the cost of raw material purchases in June is $158,880, what are the estimated cash disbursements for raw materials purchases in July?8. What is the estimated accounts payable balance at the end of July?9. What is the estimated raw materials inventory balance at the end of July?10. What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced?11. If the company always uses an estimated predetermined plantwide overhead rate of $9 per direct labor-hour, what is the estimated unit product cost?

2. The Cash collection for July will be 60% of the amount of Sales in June which is $362,700 [(9300 Units * $65 / unit) * 60%] plus 40% of the amount of Sales in July which is $624,000 [(24,000 Units * $65/Unit) * 40%]

3. The Account Receivable at the end of July will be 60% of the Sales amount in the month of July 936,000 [(24,000 Units * $65/Unit) * 60%].

4. The units to be produced in July according to the production budget is 16800 Units, 30% of finished units will already be completed in June and 70% of units for July will be made in the same month of July (24000*70%)

5. The raw material to be purchased in July to meet the production need for August will be 97,840 Pounds [(20% of 105,200 pounds) + (24000 units of July * 4 pounds / unit * 80%)].

6. The estimated cost of Raw material purchase in July will be $244,600 (97,840 pounds * $2.5/pound).

7. The cash disbursements for raw materials purchases in July will be $184,596 [($158,880 * 70%) + ($244,600 * 30%)].

8. The account payable balance at the end of July will be $171,220 ($244,600 * 70%).

9. The estimated inventory balance of raw material at the end of July will be 20,800 pounds (26,000 units * 4 pounds/unit *

20%)

10. The total estimated direct labor cost for July will be $470,400 (24000 units * 70% * 2 labor hours/unit * $ 14/ hour).

11. The total per unit cost will be $ 57.9/unit ($18 + $1.9 + $28 + $10)

• Fixed cost per unit = $18 / unit ($9/hour * 2 hours/unit)

• Variable cost per unit = $1.9/unit

• Direct labor cost per unit = $28/unit ($14/hour * 2 hours/unit)

• Raw material cost per unit = $10 /unit ($2.5/pound * 4 pounds/unit)