1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
navik [9.2K]
3 years ago
14

Morganton Company makes one product and it provided the following information to help prepare the master budget for its four mon

ths of operations:
(a) The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 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 20% of the following month
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 $2.00 per pound.
Required:
1. Discuss some of the major benefits to be gained from budgeting. Support your answer with suitable example?
2. What are the budgeted sales for July?
3. What are the expected cash collections for July?
4. What are the accounts receivable balance at the end of July?
5. According to the production budget, how many units should be produced in July?
Business
1 answer:
Ipatiy [6.2K]3 years ago
4 0

Answer:

Morganton Company

1. Budgeting increases effective financial management while ensuring proper allocation of scarce resources.  It encourages planning for the future as well as improved business decisions.  It helps management to identify problems before they occur and to develop strategies for solving any problems that may arise.  With budgeting, the organization is in a better position to monitor its overall performance and ensure the achievement of its goals and objectives.  Finally, budgeting increases the motivation to achieve goals for both the management and individual employees.

2. The budgeted sales for July are $10,000.

3. The expected cash collections for July are $9,040.

4. The accounts receivable balance at the end of July are $6,000.

5. According to the production budget, the units produced in July are 1,040 units.

Explanation:

a) Data and Calculations:

Budgeted selling price per unit = $70

                                      June      July       August    September  

Budgeted unit sales     8,400   10,000    12,000       13,000

Cash Collections:

40% month of sale      3,360     4,000      4,800        5,200

60% month following                5,040      6,000        7,200

Total cash collections 3,360     9,040    10,800       12,400

Production costs:

                                      June      July    August    September

Ending Inventory        2,000     2,400     2,600

Cost of goods sold     8,400   10,000    12,000       13,000

Goods available        10,400   12,400    14,600

Beginning Inventory   1,680    2,000      2,400         2,600

Production costs        8,720   10,400    12,200

Unit cost of materials $10         $10          $10   ($2 * 5)

Units produced            872      1,040      1,220

Accounts receivable balance at July end:

June credit sales      $8,400

June cash collection  3,360

July 1 Beginning bal.  5,040

July credit sales       10,000

Cash collections       9,040

Ending balance        6,000

You might be interested in
Sunrise foods has been developing a new line of meatless breakfast sandwiches. Sunrise has identified a market segment and, thro
musickatia [10]

Answer:

Responsiveness

Explanation:

Segmentatiom is the process by which a business targets a group of customers based on shared characteristics which may include education, income, age, race, location, and so on.

Responsiveness is the stage of segmentatiom where the appeal of the product to customers are tested. It is a very important stage. If customers don't respond positively to a product the aim of targeting them is defeated.

Sunrise foods used surveys and blind taste tests to guage the responsiveness of the segment to the new line of meatless breakfast sandwiches. The result was a favourable reaction from the segment to the new product offering.

3 0
3 years ago
_____ means the extent to which the idea is viable and realistic, and the extent to which you are aware of internal and external
Ostrovityanka [42]
Flexibility is the word you’re looking for.
4 0
2 years ago
A bond with a maturity value of $700,000 was initially issued for $715,000. The bond has a ten-year life and a stated interest r
Ann [662]

Answer:

The correct answer is option B.

Explanation:

The maturity value of the bond is $700,000.

The bond is issued for $715,000.

The life of the bond is 10 years.

The interest rate is 10%.

The total life expense will be

= \$700,000\ -\  (\$715,000\  -\  \$700,000)\ \times \ 10\%\ \times\ 10

= \$700,000\ -\ \$15,000\ \times\ 0.10\ \times\ 10

= $700,000 - $15,000

= $685,000

6 0
3 years ago
Which one of the following is the formula that explains the relationship between the expected return on a security and the level
Stels [109]

Answer: E. Capital asset pricing model

Explanation:

The Capital Asset Pricing model can be used to calculate the expected return of a security given some variables including its systematic risk which is measured by its beta.

The formula is;

Expected Return = Risk free rate + beta(market premium)

The model therefore shows that when the systematic risk is high, the expected return will also be high as well as helping to show the magnitude of the effect of a change in the market premium.

7 0
3 years ago
A wealthy industrialist wishes to establish a $2,000,000 trust fund which will provide income for his grandchild into perpetuity
natta225 [31]

Answer:

The grandchild will receive at least $140,000 per year.

Explanation:

Because the principal of the trust is not distributed as stipulated in the trust agreement, the only income source from the trust fund is its interest income earned on trust principal.

The interest rate is given to be at least 7% per year, so we have the minimum income the grandchild receives each year will be calculated as:

Principal of trust fund x Minimum interest rate earned from trust = 2,000,000 x 7% = $140,000.

So, the answer is $140,000.

7 0
3 years ago
Other questions:
  • What voting system is preferred by voting rights activists as a means of increasing minority representation?
    8·1 answer
  • Identify the level of the literature hierarchy for u.s. gaap to which each item belongs
    10·1 answer
  • Esky corporation, a chain of retail stores, monitors 10 performance indicators that are believed to be correlated with better qu
    13·1 answer
  • Marissa owns an equestrian clothing store. After many customers complained that her clothing only fit petite riders, she decided
    12·1 answer
  • What does a budget account for primarily??
    11·1 answer
  • As you start consuming potato chips, your marginal utility is very high, but begins to fall slowly until you've eaten 10 chips.
    14·1 answer
  • Which of the following about non-insurance contracts is FALSE?: A. like insurance contracts they involve transfer of risks. B. c
    15·1 answer
  • Arizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus Development Co. Relevan
    14·1 answer
  • Holton Company has the following equivalent units for July: materials 20,000 and conversion 18,000. Production cost data are:
    10·1 answer
  • What are the characteristics of economic globalization​
    7·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!