Front Page Video Games Corporation has forecasted the following monthly sales:

January $$107,000$ July $$52,000$

February $100,000$ August $52,000$

March $32,000$ September $62,000$

April $32,000$ October $92,000$

May $27,000$ November $112,000$

June $42,000$ December $130,000$

Total sales $=$ $$840,000$

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, $40$ percent are for cash and $60$ 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 $32,000$ units. $($Note: To do part a$,$ you should work in terms of units of production and units of sales.$)$

Front Page Video Games Corporation

Production and inventory schedule in units

Beginning

inventory $+$ Production $$ Sales $=$ Ending

inventory

January $32,000+$

$$

$=$

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 b using 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

Sales $

$

$

$

$

$

Cash sales

Prior month$$s sales

Total cash receipts $

$

$

$

$

$

c$.$ Determine a cash payments schedule for January through December. The production costs of $$2$ per unit are paid for in the month in which they occur. Other cash payments, besides those for production costs, are $$52,000$ per month.

Front Page Video Games Corporation

Constant production

January February March April May June

Production cost $

$

$

$

$

$

Other cash payments

Total cash payments $

$

$

$

$

$

Front Page Video Games Corporation

Constant production

July August September October 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.$)$

Front Page Video Games Corporation

January February March April May June

Net cash flow $

$

$

$

$

$

Beginning cash

Cumulative cash balance $

$

$

$

$

$

Monthly loan or $($repayment$)$

Cumulative loan

Ending cash balance $

$

$

$

$

$

Front Page Video Games Corporation

July August September October November December

Net cash flow $

$

$

$

$

$

Beginning cash

Cumulative cash balance $

$

$

$

$

$

Monthly loan or $($repayment$)$

Cumulative loan

Ending cash balance $

$

$

$

$

$