Front Page Video Games Corporation has forecasted total sales for next financial year as $1,200,000 and the the following monthly sales are projected for January to June January $150,000 February 120,000 March 60,000 April 50,000 May 40,000 June 20,000 Total sales for Janu 440,000 Total for the year is 1.200.000 The firm sells its popular 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 total 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 25,000 units (Note. To do part a, you should work in terms of units of production and units of sales.) b. Prepare a monthly schedule of cash receipts Sales in the December before the planning year were $100,000 Work part b using dollars c. Determine a cash payments schedule for January through June. The production costs of $2 per unit 50 percent of the production cost is paid for in the month in which they occur and the other 50 percent of Now D50 AB D E $2 per unit. 50 percent of the production cost is paid for in the month in which they occur and the other 50 percent of the production cost is paid in the following month 35,000 units were produced in December of the prior year. Other cash payments, besides those for production costs, are $30,000 per month Dividends of $40,000 is due for payment in March and June d. Prepare a monthly cash budget for January through June. The beginning cash balance is $5.000, and that is also the minimum desired Solutions Use the key facts below to enter formulas to solve the requirements of the problem. Key facts: Selling price per unit $5 Cost to produce Percent of sales on cash basis $2 30% a. Construct a monthly production and inventory schedule in units. Beginning inventory in January is 25,000 units. (Note: To do part a, you should work in terms of units of production and units of sales) Months Jan Beginning Inventory Production Sales Ending Inventory Feb Mar Apr May Jun Inetnintinne 01 V30 Q2 V2n Q3 V1n Q4 V3n Q5 V2n New M AB D E b. Prepare a monthly schedule of cash receipts Sales in the December before the planning year were $100,000 Note Work this part using dollars Cash Receipts Schedule Sales 30% Cash sales Jan Feb Mar Apr May Jun 70% prior month's sales Total cash receipts c Determine a cash payments schedule for January through June. The production costs of $2 per unit 50 percent of the production cost is paid for in the month in which they occur and 50 percent of the production cost is paid in the following month. 35,000 units were produced in December of the prior year Other cash payments, besides those for production costs, are $30,000 per month Dividends of $40,000 is due for payment in March and June Cash Payments Schedule Jan Feb Mar Apr May Jun Inventory Payment in Month of Production Inventory Payment for Prior Month Other cash payments Dividend Payment Total cash payments d. Prepare a monthly cash budget for January through June. The beginning cash balance is $5,000, and that is also the minimum desired Cash Budget Net cash flow Beginning cash Cumulative cash balance Monthly loan (repayment) Cumulative loan Ending.each balance Jan Feb Mar Apr May Juni Total cash payments. d. Prepare a monthly cash budget for January through June. The beginning cash balance is $5,000, and that is also the minimum desired Dividend Payment Cash Budget Net cash flow Beginning cash Cumulative cash balance Monthly loan (repayment) Cumulative loan Ending cash balance Jan Feb Mar Apr May 4