Silver Corporation has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $76
Budgeted unit sales (all on credit):
January 9,500
February 9,900
March 10,600
April 12,600
Raw materials requirement per unit of output 3 pounds
Raw materials cost $5.00 per pound
Direct labor requirement per unit of output 2.2 direct labor-hours
Direct labor wage rate $18.00 per direct labor-hour
Credit sales are collected:
40% in the month of the sale
60% 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 10% of the following month's sales. The ending raw materials inventory should equal 40% of the following month's raw materials production needs. Required:
A. What are the budgeted sales for February?
B. What are the expected cash collections for February?
C. What is the budgeted accounts receivable balance at the end of February?
D. According to the production budget, how many units should be produced in February?
E. If 32,400 pounds of raw materials are needed for production in March, how many pounds of raw materials should be purchased in February?
F. What is the estimated cost of raw materials purchases for February?
G. If the cost of raw material purchases in January is $145,680, then in February what are the total estimated cash disbursements for raw materials purchases?
H. What is the estimated accounts payable balance at the end of February?
I. What is the estimated raw materials inventory balance at the end of February?
J. What is the total estimated direct labor cost for February assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced?