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Morganton Company makes one product and it provided the following information to help prepare the master budget for its four months of operations:
(a)
The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,600, 27,000, 29,000, and 30,000 units, respectively. All sales are on credit.
(b) Thirty-percent of credit sales are collected in the month of the sale and 70% in the following month.
(c) The ending finished goods inventory equals 30% of the following month’s unit sales.
(d) The ending raw materials inventory equals 20% of the following month’s raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.50 per pound.
(e) Twenty five-percent of raw materials purchases are paid for in the month of purchase and 75% in the following month.
(f) The direct labor wage rate is $13 per hour. Each unit of finished goods requires two direct labor-hours.
(g) The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $66,000.
What is the estimated cost of raw materials purchases for July?
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