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ombs Away Video Games Corporation has forecasted the following monthly sales:

January	$	114,000	July	$	59,000
February		107,000	August		59,000
March		39,000	September		69,000
April		39,000	October		99,000
May		34,000	November		119,000
June		49,000	December		137,000
Total annual sales = $924,000

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, 20 percent are for cash and 80 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 39,000 units.

 

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January February March April May June July August September October November December Beginning Inventory Bombs Away Video Games Corporation Production and Inventory Schedule in Units Production Sales 39,000 31,600✔ 25,600✔ 33,200✔ 40,800✔ 49,400✔ 55,000 58,600 62,200 63,800 59,400 51,000 Sales Cash receipts: Cash sales Prior month's credit sales Total cash receipts + $ Answer is complete and correct. $ $ 15,400✔ 15,400✔ 15,400✔ 15,400✔ 15,400✓✔ 15,400✔ 15,400 15,400 15,400 15,400 15,400 15,400 January 114,000 $ 22,800✔ 21,400 b. Prepare a monthly schedule of cash receipts. Sales in December before the planning year are $100,000. 22,800 $ 80,000✔ 102,800 $ 7,800✔ 7,800 6,800 9,800✔ 333333333333 11,800 11,800✔ 13,800✔ 19,800 23,800 27,400 = Bombs Away Video Games Corporation Cash Receipts Schedule March February 107,000 $ Ending Inventory 31,600 25,600 33,200✔ 40,800 49,400 55,000 58,600 62,200 63,800 59,400 51,000 39,000 > Answer is complete but not entirely correct. 21,400 S 91,200✔ 112,600 $ 39,000 $ 7,800 $ 85,600✔ 93,400 $ April 34,000 $ 7,800 $ 31,200✔ 39,000 $ May 49,000 $ 6,800 $ 31,200✔ 38,000 $ June 59,000 9,800✔ 27,200✔ 37,000 January February March April May June July August September October November December Beginning Inventory Bombs Away Video Games Corporation Production and Inventory Schedule in Units Production Sales 39,000 31,600✔ 25,600✔ 33,200✔ 40,800✔ 49,400✔ 55,000 58,600 62,200 63,800 59,400 51,000 Sales Cash receipts: Cash sales Prior month's credit sales Total cash receipts + $ Answer is complete and correct. $ $ 15,400✔ 15,400✔ 15,400✔ 15,400✔ 15,400✓✔ 15,400✔ 15,400 15,400 15,400 15,400 15,400 15,400 January 114,000 $ 22,800✔ 21,400 b. Prepare a monthly schedule of cash receipts. Sales in December before the planning year are $100,000. 22,800 $ 80,000✔ 102,800 $ 7,800✔ 7,800 6,800 9,800✔ 333333333333 11,800 11,800✔ 13,800✔ 19,800 23,800 27,400 = Bombs Away Video Games Corporation Cash Receipts Schedule March February 107,000 $ Ending Inventory 31,600 25,600 33,200✔ 40,800 49,400 55,000 58,600 62,200 63,800 59,400 51,000 39,000 > Answer is complete but not entirely correct. 21,400 S 91,200✔ 112,600 $ 39,000 $ 7,800 $ 85,600✔ 93,400 $ April 34,000 $ 7,800 $ 31,200✔ 39,000 $ May 49,000 $ 6,800 $ 31,200✔ 38,000 $ June 59,000 9,800✔ 27,200✔ 37,000