Budget of Cash Requirements (C.G.A., adapted) Based on a sales forecast for the season, the Singapore department of a manufacturing company has prepared the following production schedule for the coming month: 30,000 units of Product A and 20,000 units of Product B. The manufacturing specifications for the products are as follows:

PRODUCT A ~ PRODUCT B 2 Ibs. material X @ $.30 3 Ibs. material W @ $.80 1/2 |b. material Y @ $.20 3/4 |b. material Y @ $.20 2 hours direct labor @ $2.00 1.5 hours direct labor @ $2.00 To the direct-labor hours, a 5 percent allowance for idleness (accounted for as overhead) should be added. Indirect-labor time is estimated to be 5 percent of direct-labor hours (excluding idleness), and the wage rate for indirect labor is $1.50. The overhead estimate (not shown above) is as follows:
FIXED COSTS PER MONTH VARIABLE COSTS Depreciation $ 6,900 $.80 per direct-labor hour.
Expired insurance 800 NOTE: This rate includes the Superintendence 3,000 costs of idle time and $10,700 indirect labor.
It is planned to increase the inventory of raw material X by 4,000 lbs. and to decrease the inventory of raw material W by 2,000 lbs. as of the beginning of the next month.
Prepare a prediction of the amount of cash necessary for the manufacturing operations of the coming month. Assume that materials and payroll costs are paid for in the month of purchase.

 L01