Front Page Video Games Corporation has forecasted the following monthly sales January $89,000 February 96,000 March 21,000 April 21,000 May 16,000 June 31,000 Total sales = $700,000 July August September October November December $41,000 41,000 51,000 81,000 101,000 119,000 The firm sells its Last Spike video game for $5 per unit, and the cost to produce the game is $2 per unit. 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, 20 percent are for cash and 80 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 21,000 units (Note: To do part, you should work in terms of units of production and units of sales.) Help Save a. Construct a monthly production and inventory schedule in units. Beginning inventory in January is 21,000 units. (Note: To do part a, you should work in terms of units of production and units of sales.) Ending inventory Front Page Video Games Corporation Production and inventory schedule in units Beginning inventory - Production - Sales January 21.000 + February March April May June July August September October November December b. Prepare a monthly schedule of cash receipts. Sales in the December before the planning year were $100,000. Work part busir dollars Front Page Video Games Corporation January February March April $ $ $ May June Sales Cash sales Prior month's sales Total cash receipts Front Page Video Games Corporation July August September October $ $ November $ December 5 Sales Cash sales Prior month's salos Total cash receipts $ $ 3 c. Determine a cash payments schedule for January through December. The production costs of $2 per unit are paid for in the marth in which they occur. Other cash payments, besides those for production costs, are $41.000 per month Front Page Video Games Corporation Constant production January February March April May Production cost other cash payments $ June $ $ pped Total cash payments S $ $ Pont erences July Front Page Video Games Corporation Constant production September October $ s November December Production cost Other cash payments Total cash payments $ $ d. Prepare a monthly cash budget for January through December. The beginning cash balance is $5,000, and that is also the minimum desired. (Do not leave any empty spaces: input a 0 wherever it is required. Negative answers and amounts to be deducted should be indicated by a minus sign.) ed Front Page Video Games Corporation January February March S $ 5 April May June Net cash flow Beginning cash $ 5 $ no Cumulative cash balance Monthly loan or (repayment) Cumulative loan Ending cash balance $ $ $ Front Page Video Games Corporation July August September October 5 November December $ Net cash flow Beginning cash $ $ Cumulative cash balance Monthly loan or (repayment) Cumulative loan Ending cash balance $ 5 5 $
