Sevenbergen 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$92Budgeted unit sales (all on credit): July 9,000August 11,300September 10,400October 10,800? Raw materials requirement per unit of output 4poundsRaw materials cost$1.00per poundDirect labor requirement per unit of output 2.8direct labor-hoursDirect labor wage rate$22.00per direct labor-hourVariable selling and administrative expense$1.50per unit soldFixed selling and administrative expense$70,000per month?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 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs.?The estimated selling and administrative expense for August is closest to:
A. $86,950
B. $57,970
C. $70,000
D. $16,950
Answer: A
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