Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct labor-hour Predetermined overhead rate (all variable) $ 9.00 per direct labor-hour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month 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 unit product cost is closest to:
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Since each unit requires 4 pounds of raw materials and each pound costs $1.00, the cost of raw materials per unit is $4.00. Show more…
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