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

January $106,000 July $51,000 February 99,000 August 51,000 March 31,000 September 61,000 April 31,000 October 91,000 May 26,000 November 111,000 June 41,000 December 129,000 Total sales = $828,000

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, 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. The beginning inventory in January is 31,000 units. (Note: To do part a, you should work in terms of units of production and units of sales.) Can you show how to calculate sales

Front Page Video Games Corporation Production and inventory schedule in units

Beginning inventory + Production Sales = Ending inventory

January 31,000

February

March

April

May

June

July

August

September

October

November

December