Sevenbergen Corporation Makes One Product and Has Provided the Following

Sevenbergen 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:40% in the month of the sale60% in the following monthRaw materials purchases are paid:30% in the month of purchase70% in the following monthThe 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 direct labor cost for August is closest to:

A) $465,000
B) $684,992
C) $31,136
D) $244,640

Correct Answer:

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