| Question 33 The controller of Harrington Company estimates sales and production for the first four months of 2020 as follows: | | | January | | February | | March | | April | | Sales | | $29,300 | | $38,600 | | $54,400 | | $24,200 | | Production in units | | 1,100 | | 1,600 | | 2,000 | | 2,700 | Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 40% of credit sales are collected. It takes 4 kg of direct materials to produce a finished unit, and direct materials cost $5 per kg. All direct materials purchases are on account, and are paid as follows: 40% in the month of the purchase and 60% the following month. Ending direct materials inventory for each month is 40% of the next months production needs. Januarys beginning materials inventory is 1,110 kg. Suppose that both accounts receivable and accounts payable are zero at the beginning of January. | | | |
