Ultravision Inc. anticipates sales of $290,000 from January through April. Materials will represent 50 percent of sales,
Question:
Ultravision Inc. anticipates sales of $290,000 from January through April. Materials will represent 50 percent of sales, and because of level production, material purchases will be equal for each month during the four months of January, February, March, and April.
Materials are paid for one month after the month purchased. Materials purchased in December of last year were $25,000 (half of $50,000 in sales). Labor costs for each of the four months are slightly different due to a provision in the labor contract in which bonuses are paid in February and April. The labor figures are:
January ........$15,000
February ........ 18,000
March ........ 15,000
April......... 20,000
Fixed overhead is $11,000 per month. Prepare a schedule of cash payments for January through April.
Step by Step Answer:
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen