Answer:
$93,956
Explanation:
Morganton pays 30% of its raw materials purchases during the current month and the rest (70%) is paid in teh following month.
Raw materials purchases for June = $88,880: $88,880 x 70% = $62,216 paid in July.
Raw materials purchases for July = $105,800: $105,800 x 30% = $31,740
total cash disbursements related to raw materials = $93,956
total cost of raw materials for July
budgeted unit sales 10,000
- beginning inventory 2,000 units
<u>+ desired inventory 2,400 units (20% of August's requirements)</u>
units produced = 10,400
x 5 pounds of raw materials = 52,000 pounds
- beginning inventory of raw materials 5,200
<u>+ ending inventory of raw materials 6,100 (10% of August's requirements)</u>
total raw materials purchased 52,900 pounds
<u>x $2 per pound </u>
total raw materials cost for July $105,800
