Question
The Volt Battery Company has forecast its sales in units as follows: January 2,100 May 2,650 February 1,950 June 2,800 March 1,900 July 2,500 April
The Volt Battery Company has forecast its sales in units as follows: January 2,100 May 2,650 February 1,950 June 2,800 March 1,900 July 2,500 April 2,400 Volt Battery always keeps an ending inventory equal to 110% of the next months expected sales. The ending inventory for December (Januarys beginning inventory) is 2,310 units, which is consistent with this policy. Materials cost $10 per unit and are paid for in the month after purchase. Labor cost is $3 per unit and is paid in the month the cost is incurred. Overhead costs are $12,500 per month. Interest of $9,300 is scheduled to be paid in March, and employee bonuses of $14,500 will be paid in June. a. Prepare a monthly production schedule for January through June. b. Prepare a monthly summary of cash payments for January through June. Volt produced 1,900 units in December.
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