Michard Corporation Makes One Product and It Provided the Following

question 99

Multiple Choice

Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit.
B. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month.
C. The ending finished goods inventory equals 20% of the following month's sales.
D. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound.
E. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month.
F. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours.
G. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000.
If 54,480 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

• A) $148,752
• B) $89,280
• C) $121,968
• D) $95,184

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Definitions:

Biodiversity

The variety of plant and animal life in the world or in a particular habitat, considered important for maintaining ecological balance.

Trees

Perennial plants with an elongated stem, or trunk, supporting branches and leaves in most species.

Erosion

Erosion is the process by which natural forces like water, wind, or ice wear away land surfaces, transporting the materials from one location to another.

Pollutants

substances that pollute something, especially water or the atmosphere, and can cause harm to the environment and health.