Bombs away video games corporation has forecasted the following monthly sales: january $ 115,000 july $ 60,000 february 108,000 august 60,000 march 40,000 september 70,000 april 40,000 october 100,000 may 35,000 november 120,000 june 50,000 december 138,000 total annual sales = $936,000 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, 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 40,000 units.
b. prepare a monthly schedule of cash receipts. sales in december before the planning year are $100,000.
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 $60,000 per month.