Question

Bombs Away Video Ganes Corportation has forecasted thr folkowing monthly sales:

January. $100,000. July. $. 45,000

February. 93,000. August. 45,000

March. 25,000. Seotember. 55,000

April. 25,000. October. 85,000

May. 20,000. November. 105,000

June. 35,000. Decenber. 123,000

Total annual sales = $756,000

Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit in produce. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by 12.

If each month's sales, 30 percent are fir cash abd 70 percent are on account. All accounts receivable are collected in the month after sale is made.

a. Construct a monthly production and inventory schedule in units. Beginning inventory in January is 25,000 units. (Note: To do part a, you should work in units of production and unit of sales.)

b. Prepare a monthly schedule of cash receipts. Sales in the December before the planning year are $100,000. Work part b using dollars.

c. Determine a cash payments schedule fir January through December. The production cost of $2 per unit are paid in the month in which they occur. Other cash payments, besides thise fir production cost, are $45,000 per month.

d. Prepare a monthly cash budget for January thriugh Decsmber using the cash receipts schedule fron part b and the cash payments schedule from part c. The beginning cash balance is $5,000, which also the minimum desired.

Answer 1

Answer a.

Answer b.

Answer c.

Answer d.