Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:
30% in the month of the sale
70% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs.
The estimated net operating income (loss) for February is closest to:

Question

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:   Credit sales are collected:
30% in the month of the sale
70% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs.
The estimated net operating income (loss) for February is closest to:

Quizplus · Accepted Answer

The estimated unit product cost is computed as follows:
 11eacbfc_c5fa_daa4_8ffe_7388825f5025_TB7552_00 The estimated selling and administrative expense for February is computed as follows:
 11eacbfc_c5fa_daa5_8ffe_19c53a8d3742_TB7552_00 The estimated net operating income for February is computed as follows:
 11eacbfc_c5fb_01b6_8ffe_eb59c814c136_TB7552_00

Bonkowski Corporation Makes One Product and Has Provided the Following