Production cash outflow. California Cement Company produces its products two mon

Question

Production cash outflow. California Cement Company produces its products two months in advance of anticipated sales and ships to warehouse centers the month before sale. The inventory safety sto is 20% of the anticipated month's sale. Beginning inventory in September 2014 was 33,913 units. Each unit costs $2.80. The average sales pri e per unit is S5.75. The cost is made up o 30% labor, 65% materials, and 5% shipping to the warehouse The company pays for labor the month of production, shipping the month after production, and raw materials the month prior to production. What is the production cash outflow for products produced in the month of September 2014, and in what months does it occur? Note: September production is based on November anticipated sales. The following are the fourth-quarter sales for 2014: $1,800,000 (October),$1,600,000 (November), and $2,100,000 (December). What is the production cash outlow for the month of September 2014 production? The labor cost isRound to the nearest dollar.) The raw materialscot is(Round to the nearest dollar.) The shipping cost is (Round to the nearest dollar) In what months does the production cash outflow for the month of September 2014 production occur? The production cash outlow for the month of September 2014 production is as follows: (Select the best response. Due to rounding, numbers below might differ from your original answers a few dollar units) A. August labor, S252,000; September for raw materials. S 546,000; October for shipping. S42.000. O B. August for raw materials, $546,000, September for labor, $252,000, Ocober for shipping, $42,000. O C. August for raw materials, $546,000; September for shipping, $42,000; October for labor, $252,000. O D. August for shipping, $42,000; September raw materials, $546,000; October for labor, $252,000. Click to select your answers).

Explanation / Answer

A November anticipated sales $1,600,000 B=A/5.75 Anticipated sales in units            278,261 G=B*0.2 Safety stock              55,652 H=B+G Total requirement            333,913 I Beginning inventory in september 33913 J=H-I Quantity to be produced            300,000 Month of Anticipated sales in November2014 $1,600,000 Cash flow November Sales in units            278,261 J Units of production in September 2014            300,000 C=2.8*J Cost of Production in Sep 2014 $        840,000 D=0.3*C Labor cost $        252,000 September E=0.65*C Raw material cost $        546,000 August F=0.05*C Shipping cost $          42,000 October Answer: B August for raw materials$546,000,September for labor $252,000 and October for Shipping $42.000

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.