Michard Corporation Makes One Product and It Provided the Following

question 212

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 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:

Heredity

The passing of traits from parents to their offspring through genes, influencing various characteristics and predispositions.

Constitutional Growth Delay

A pattern where children have a slower rate of growth and development, but eventually catch up to their peers in height and sexual maturation.

Human Growth Hormones

Peptide hormones secreted by the pituitary gland that stimulate growth, cell reproduction, and cell regeneration in humans and other animals.

Self-Esteem

An individual's overall subjective emotional evaluation of their own worth or value.