In this mini-case, you will be doing the same analysis but using information a seasonal production...

 

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In this mini-case, you will be doing the same analysis but using information a seasonal production schedule. With a seasonal production schedule, the company will ONLY produce the same amount of units they are projecting to sell each month. Seasonal Products Corporation expects the following monthly sales: $20,000 $15,000 $5,000 January February March April May June $3,000 $1,000 $3,000 July August September October November December $10,000 $14,000 $20,000 $25,000 $30,000 $22,000 Sales are 20% cash in a given month, with the remainder going into accounts receivable. All 80% of the credit sales are collected in the month following the sale. Seasonal Products Corporation sells all its units for $2 each and produces them for $1. Seasonal Products Corporation matches their production schedule to the projected level of sales. For example, if they are expecting to sell 10,000 units in a month, they only produce 10,000 units. a) Generate a monthly production and inventory schedule in units. Beginning inventory in January is 0 units. (Note: in part a) you should work in terms of units of production and units of sales) b) Determine a cash receipts schedule for January through December. Assume dollar sales in December were $15,000. Work using dollars. c) Determine a cash payments schedule for January through December. The production costs ($1 per unit produced) are paid in the month in which they occur. Other cash payments, besides those for production costs, are $7,000 per month for the seasonal production. d) Construct a cash budget for January through December. The beginning cash balance is $1,000, and that is also the required monthly minimum. In this mini-case, you will be doing the same analysis but using information a seasonal production schedule. With a seasonal production schedule, the company will ONLY produce the same amount of units they are projecting to sell each month. Seasonal Products Corporation expects the following monthly sales: $20,000 $15,000 $5,000 January February March April May June $3,000 $1,000 $3,000 July August September October November December $10,000 $14,000 $20,000 $25,000 $30,000 $22,000 Sales are 20% cash in a given month, with the remainder going into accounts receivable. All 80% of the credit sales are collected in the month following the sale. Seasonal Products Corporation sells all its units for $2 each and produces them for $1. Seasonal Products Corporation matches their production schedule to the projected level of sales. For example, if they are expecting to sell 10,000 units in a month, they only produce 10,000 units. a) Generate a monthly production and inventory schedule in units. Beginning inventory in January is 0 units. (Note: in part a) you should work in terms of units of production and units of sales) b) Determine a cash receipts schedule for January through December. Assume dollar sales in December were $15,000. Work using dollars. c) Determine a cash payments schedule for January through December. The production costs ($1 per unit produced) are paid in the month in which they occur. Other cash payments, besides those for production costs, are $7,000 per month for the seasonal production. d) Construct a cash budget for January through December. The beginning cash balance is $1,000, and that is also the required monthly minimum.

Answer rating: 100% (QA)

a Monthly Production and Inventory Schedule in Units To generate the monthly production and inventory schedule in units we will match the production schedule to the projected level of sales The beginn... View the full answer