Rokosz Corporation Makes One Product and It Provided the Following

question 67

Multiple Choice

Rokosz 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 $104. Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively. All sales are on credit.
b. Regarding credit sales, 30% are collected in the month of the sale and 70% 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 5 pounds of raw materials. The raw materials cost $2.00 per pound.
e. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours.
-The expected cash collections for November is closest to:

• A) $502,320
• B) $221,520
• C) $723,840
• D) $717,600

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Definitions:

Credit Accounts

Accounts within financial accounting that are increased with a credit entry, carrying a balance that could be beneficial (revenue, gains) or detrimental (liabilities, expenses).

Journal Entry

A record in accounting that logs the debit and credit parts of a transaction in the financial records of a company.

Journal

A record where all financial transactions are initially recorded, using debits and credits, before being posted to individual accounts.

Increase Side

Refers to the side (debit or credit) of an account that is used to increase its balance, varying by account type.