Monthly Cash Payments December* January February March Units to be produced 1,80
ID: 2640619 • Letter: M
Question
Monthly Cash Payments
December*
January
February
March
Units to be produced
1,800,000
1,400,000
Materials (from previous month)
$93,600 (1,800*$52)
Labor
$28,000 (1,400*$20)
Overhead
$14,000 (1,400*$10)
Selling and administrative expense (20% of sales)
$52,700 (20%*$263,500)
Interest
8,000
Taxes (40%)
$64,560**
Dividends
$48,420**
Total
$188,300
December*
January
February
March
Units to be produced
1,800,000
1,400,000
Materials (from previous month)
$93,600 (1,800*$52)
Labor
$28,000 (1,400*$20)
Overhead
$14,000 (1,400*$10)
Selling and administrative expense (20% of sales)
$52,700 (20%*$263,500)
Interest
8,000
Taxes (40%)
$64,560**
Dividends
$48,420**
Total
$188,300
Explanation / Answer
Forecasting with Seasonal Production
Dec.
Jan.
Feb.
Mar.
Projected Unit Sales
1,500,000
1,700,000
1,200,000
1,400,000
+Desired Ending Inventory (2 months supply)
2,900,000
2,600,000
3,400,000
4,500,000
Forecasting with Seasonal Production
Dec.
Jan.
Feb.
Mar.
Projected Unit Sales
1,500,000
1,700,000
1,200,000
1,400,000
+Desired Ending Inventory (2 months supply)
2,900,000
2,600,000
3,400,000
4,500,000
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