Michard Corporation Makes One Product and It Provided the Following

question 196

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.
-The estimated direct labor cost for May is closest to:

• A) $558,000
• B) $33,480
• C) $837,000
• D) $279,000

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Definitions:

Constructive Eviction

Occurs when a landlord's failure to maintain the leased premises effectively forces the tenant to leave due to uninhabitable conditions.

Implied Warranty

An assurance, not explicitly stated, that a product meets certain quality and reliability standards.

Remedy

Legal means by which a right is enforced or the violation of a right is prevented, redressed, or compensated.

Tenancy At Sufferance

The leasehold interest that occurs when a tenant remains in possession of property after the expiration of a lease.