Luchini 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 $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit.
b. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month.
c. The ending finished goods inventory equals 10% 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 $5.00 per pound.
e. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.
f. The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct labor-hours.
g. Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero.
-The estimated finished goods inventory balance at the end of May is closest to:

Question

Quizplus · Accepted Answer

The estimated unit product cost is computed as follows:
 11ea7761_17ba_7589_81a5_d5daeebe0e11_TB2580_00 The estimated finished goods inventory balance at the end of May is computed as follows:
 11ea7761_17ba_9c9a_81a5_8507a7d93c2b_TB2580_00 *June sales of 13,300 units × 10% = 1,330 units

Luchini Corporation Makes One Product and It Provided the Following