Craney Corporation Makes One Product and It Provided the Following

question 253

Essay

Craney 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 $87. Budgeted unit sales for January, February, March, and April are 7,100, 8,300, 13,700, and 13,600 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 40% of the following month's sales.> The ending raw materials inventory equals 40% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $1.00 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 $19.00 per hour. Each unit of finished goods requires 2.7 direct labor-hours.Required:a. What are the budgeted sales for February?b. What are the expected cash collections for February?c. According to the production budget, how many units should be produced in February?d. If 68,300 pounds of raw materials are needed for production in March, how many pounds of raw materials should be purchased in February?e. What is the estimated cost of raw materials purchases for February?f. If the cost of raw material purchases in January is $43,660, then in February what are the estimated cash disbursements for raw materials purchases?g. What is the total estimated direct labor cost for February assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced?

---

Definitions:

Political Institutions

Structures and systems within a society that organize, govern, and manage public policy and affairs.

Social Institutions

Complex systems of norms and behaviors that fulfill societal needs, such as family, education, and religion.

Public Opinion Polling

The process of surveying public opinion from a particular sample in order to infer the opinions or behaviors of the general population.

Accurate

The quality of being correct or precise.