Michard Corporation Makes One Product and It Provided the Following

question 118

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: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.Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month.The ending finished goods inventory equals 20% of the following month's sales.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.Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month.The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours.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 raw material purchases for May is closest to:

• A) 74,376 pounds
• B) 44,640 pounds
• C) 47,592 pounds
• D) 60,984 pounds

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Definitions:

Provincial Government

A form of government found at the sub-national level, typically responsible for local regions within a country, managing areas like education and transportation.

Budget Forecasts

Predicted financial statements or estimates for future periods based on expected income and expenses.

Education

The systematic process of facilitating learning, or the acquisition of knowledge, skills, values, beliefs, and habits.

Secret Ingredient

A unique or undisclosed component that makes something, particularly a recipe or product, special or successful.