Michard Corporation Makes One Product and It Provided the Following

question 11

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 selling and administrative expense for May is closest to:

• A) $115,700
• B) $80,000
• C) $77,130
• D) $35,700

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Definitions:

Longer-Lasting Apparel

Clothing designed for durability and extended use, often focusing on high-quality materials and timeless design to reduce waste and environmental impact.

Technology

The application of scientific knowledge for practical purposes, especially in industry, where it encompasses processes, methods, or devices.

Mild Puffery

Promotional statements that are subjective opinions, exaggerations, or bluffs, used to create a positive image but not intended to be taken literally.

Informative Advertising

Informative advertising provides useful information to consumers about the benefits and features of a product or service, aiding their decision-making process.