Question
The Volt Battery Company has forecast its sales in units as follows: January 900 February 750 March 700 April 1,200 May 1,450 June 1,600 July
The Volt Battery Company has forecast its sales in units as follows: January 900 February 750 March 700 April 1,200 May 1,450 June 1,600 July 1,300 Volt Battery always keeps an ending inventory equal to 110 percent of the next months expected sales. The ending inventory for December (Januarys beginning inventory) is 990 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 $6,500 per month. Interest of $8,100 is scheduled to be paid in March, and employee bonuses of $13,300 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 Battery produced 700 units in December.
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