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:
 11ea7761_17c2_15d4_81a5_27407caabb20_TB2580_00 The estimated selling and administrative expense for February is computed as follows:
 11ea7761_17c2_15d5_81a5_07a7b6e48929_TB2580_00 The estimated net operating income for February is computed as follows:
 11ea7761_17c2_3ce6_81a5_cd1e3a7eade2_TB2580_00

Bonkowski Corporation Makes One Product and Has Provided the Following