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.
If 60,500 pounds of raw materials are required for production in December, then the budgeted cost of raw material purchases for November is closest to:

Question

Quizplus · Accepted Answer

The budgeted required production for November is computed as follows:
 11eacbfc_c5e0_0012_8ffe_9360e5aebe54_TB7552_00 *December sales of 11,300 units × 20% = 2,260 units
** November sales of 7,100 units × 20%= 1,420 units
The budgeted raw material purchases for November are computed as follows:
 11eacbfc_c5e0_2723_8ffe_f3c6db6c8f85_TB7552_00 * 60,500 pounds × 30% = 18,150 pounds.
** 39,700 pounds × 30% = 11,910 pounds.
The budgeted cost of raw material purchases for November is computed as follows:
 11eacbfc_c5e0_2724_8ffe_99ae8df25a11_TB7552_00

Rokosz Corporation Makes One Product and It Provided the Following