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Need help with this problem. Bombs Away Video Games Corporation has forecasted the following monthly sales: January February March April May June $ 98,000 July
Need help with this problem.
Bombs Away Video Games Corporation has forecasted the following monthly sales: January February March April May June $ 98,000 July 91,000 August 23,000 23,000 September October 18,000 November 33,000 December Total annual sales = $732,000 $ 43,000 43,000 53,000 83,000 103,000 121,000 Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit to produce. 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 23,000 units. Bombs Away Video Games Corporation Production and Inventory Schedule in Units Production Sales Beginning Inventory Ending Inventory January February March April May June July August September October November December Bombs Away Video Games Corporation Production and Inventory Schedule in Units Production Sales Beginning Inventory 23,000 B Ending Inventory Sales Cash receipts: Cash sales Prior month's credit sales Total cash receipts July Production cost Other cash payments Total cash payments Cash Receipts Schedule August September January c. Prepare 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 $43,000 per month. Bombs Away Video Games Corporation Cash Payments Schedule March October February November April December May June Sales Cash receipts: Cash sales Prior month's credit sales Total cash receipts July Production cost Other cash payments Total cash payments Cash Receipts Schedule August September January c. Prepare 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 $43,000 per month. Bombs Away Video Games Corporation Cash Payments Schedule March October February November April December May June Production cost Other cash payments Total cash payments July Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Bombs Away Video Games Corporation Cash Payments Schedule August September January d. Prepare a monthly cash budget for January through December using the cash receipts schedule from part b and the cash payments schedule from part c. The beginning cash balance is $5,000, which is also the minimum desired. (Negative amounts should be indicated by a minus sign.) October Bombs Away Video Games Corporation Cash Budget February March November April December May June Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loan balance Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loan balance July Bombs Away Video Games Corporation Cash Budget August September October November DecemberStep by Step Solution
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