Question

nformation to help prepare the master budget for the next four months of operations: 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. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. The ending finished goods inventory equals 20% of the following month's sales. 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. 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 $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. The budgeted sales for May is closest to: Multiple Choice $950,000 $1,612,500 $1,312,500 $1,725,000

Answer 1

Budgeted sales May= $1,312,500

Step-by-step explanation:

Giving the following information:

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.

To calculate the budgeted sales, we need to multiply the selling price for the budgeted sales in units for the month.

Budgeted sales May= 125*10,500

Budgeted sales May= $1,312,500