Please only answer if you are going to answer fully if correct I will give a rat
ID: 2815929 • Letter: P
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Please only answer if you are going to answer fully if correct I will give a rate. Also, please do not write it out and send it most handwriting cannot be read.
Bombs Away Video Games Corporation has forecasted the following monthly sales:
Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit to produce. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by 12.
Of each month's sales, 30 percent are for cash and 70 percent are on account. All accounts receivable are collected in the month after the sale is made.
a. Construct a monthly production and inventory schedule in units. Beginning inventory in January is 28,000 units.
b. Prepare a monthly schedule of cash receipts. Sales in December before the planning year are $100,000.
c. Prepare a cash payments schedule for January through December. The production costs of $2 per unit are paid for in the month in which they occur. Other cash payments, besides those for production costs, are $48,000 per month.
d. Prepare a monthly cash budget for January through December using the cash receipts schedule from part b and the cash payments schedule from part c. The beginning cash balance is $5,000, which is also the minimum desired. (Negative amounts should be indicated by a minus sign.)
January $ 103,000 July $ 48,000 February 96,000 August 48,000 March 28,000 September 58,000 April 28,000 October 88,000 May 23,000 November 108,000 June 38,000 December 126,000 Total annual sales = $792,000
Explanation / Answer
a.
Bombs Away Video Games Corporation
Production and inventory schedule in units
Beginning inventory
+
Production
-
Sales
=
Ending inventory
January
28,000
+
13,200
-
20,600
=
20,600
February
20,600
+
13,200
-
19,200
=
14,600
March
14,600
+
13,200
-
5,600
=
22,200
April
22,200
+
13,200
-
5,600
=
29,800
May
29,800
+
13,200
-
4,600
=
38,400
June
38,400
+
13,200
-
7,600
=
44,000
July
44,000
+
13,200
-
9,600
=
47,600
August
47,600
+
13,200
-
9,600
=
51,200
September
51,200
+
13,200
-
11,600
=
52,800
October
52,800
+
13,200
-
17,600
=
48,400
November
48,400
+
13,200
-
21,600
=
40,000
December
40,000
+
13,200
-
25,200
=
28,000
Total Annual sales = $792,000
Selling Price per unit = $5
Number units sold = Total annual sales ÷ Selling price per unit
= $792,000 ÷ $5
= 158,400
Monthly Production = 158,400 ÷ 12
= $13,200
b.
Bombs Away Video Games Corporation
Cash Receipts Schedule
January
February
March
April
May
June
Sales
$103,000
$96,000
$28,000
$28,000
$23,000
$38,000
Cash receipts:
Cash sales(30% of sale)
$30,900
$28,800
$8,400
$8,400
$6,900
$11,400
Prior month's credit sales(70% sale)
$70,000
$72,100
$67,200
$19,600
$19,600
$16,100
Total cash receipts
$100,900
$100,900
$75,600
$28,000
$26,500
$27,500
Bombs Away Video Games Corporation
Cash Receipts Schedule
July
August
September
October
November
December
Sales
$48,000
$48,000
$58,000
$88,000
$108,000
$126,000
Cash receipts:
Cash sales(30% of sale)
$14,400
$14,400
$17,400
$26,400
$32,400
$37,800
Prior month's credit sales(70% sale)
$26,600
$33,600
$33,600
$40,600
$61,600
$75,600
Total cash receipts
$41,000
$48,000
$51,000
$67,000
$94,000
$113,400
c.
Bombs Away Video Games Corporation
Cash Payments Schedule
Constant production
January
February
March
April
May
June
Production cost(13,200 × $2)
$26,400
$26,400
$26,400
$26,400
$26,400
$26,400
Other cash payments
$48,000
$48,000
$48,000
$48,000
$48,000
$48,000
Total cash payments
$74,400
$74,400
$74,400
$74,400
$74,400
$74,400
Bombs Away Video Games Corporation
Cash Payments Schedule
Constant production
July
August
September
October
November
December
Production cost(13,200 × $2)
$26,400
$26,400
$26,400
$26,400
$26,400
$26,400
Other cash payments
$48,000
$48,000
$48,000
$48,000
$48,000
$48,000
Total cash payments
$74,400
$74,400
$74,400
$74,400
$74,400
$74,400
d.
Bombs Away Video Games Corporation
Cash Budget
January
February
March
April
May
June
Beginning cash
$5,000
$31,500
$58,000
$59,200
$12,800
$5,000
Net cash flow(Cash receipts-Cash payments)
$26,500
$26,500
$1,200
-$46,400
-$47,900
-$46,900
Cumulative cash balance
$31,500
$58,000
$59,200
$12,800
-$35,100
-$41,900
Monthly loan or (repayment)
$40,100
$46,900
Ending cash balance
$5,000
$5,000
Cumulative loan balance
$40,100
$87,000
Bombs Away Video Games Corporation
Cash Budget
July
August
September
October
November
December
Beginning cash
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
Net cash flow(Cash receipts-Cash payments)
-$33,400
-$26,400
-$23,400
-$7,400
$19,600
$39,000
Cumulative cash balance
-$28,400
-$21,400
-$18,400
-$2,400
$24,600
$44,000
Monthly loan or (repayment)
$33,400
$26,400
$23,400
$7,400
-$19,600
-$39,000
Ending cash balance
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
Cumulative loan balance
$120,400
$146,800
$170,200
$177,600
$158,000
$119,000
Bombs Away Video Games Corporation
Production and inventory schedule in units
Beginning inventory
+
Production
-
Sales
=
Ending inventory
January
28,000
+
13,200
-
20,600
=
20,600
February
20,600
+
13,200
-
19,200
=
14,600
March
14,600
+
13,200
-
5,600
=
22,200
April
22,200
+
13,200
-
5,600
=
29,800
May
29,800
+
13,200
-
4,600
=
38,400
June
38,400
+
13,200
-
7,600
=
44,000
July
44,000
+
13,200
-
9,600
=
47,600
August
47,600
+
13,200
-
9,600
=
51,200
September
51,200
+
13,200
-
11,600
=
52,800
October
52,800
+
13,200
-
17,600
=
48,400
November
48,400
+
13,200
-
21,600
=
40,000
December
40,000
+
13,200
-
25,200
=
28,000
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