QUESTIONS TO ANSWER:

1. The labor cost is $__________.

2. The raw materials cost is $__________.

3. The shipping cost is $__________.

Production cash outflow. National Beverage Company produces its products two months in advance of anticipated sales and ships to warehouse centers the month before sale. The inventory safety stock is 6% of the anticipated month's sale. Beginning inventory in October 2014 was 265,198 units. Each unit costs $0.28 to make. The average selling price is $0.69 per unit. The cost is made up of 44% labor, 50% materials, and 6% shipping to the warehouse). The company pays for labor the month of production, shipping the month after production, and raw materials the month prior to production. What is the production cash outflow for products produced in the month of October 2014, and in what months does it occur? Note: October production is based on December anticipated sales. The fourth-quarter sales forecasts are as follows: $1,975,000 (October). $2,133,000 (November), and $2,189,000 (December). What is the production cash outflow for the month of October 2014 production? (Hint: The production cost comprises labor, raw materials, and shipping.) The labor cost is $ . (Round to the nearest dollar.) The labor cost is the product among the required production, the cost per unit, and the labor percentage of cost. Please make sure you entered the correct values in the expression, and that you used the decimal format for the percentage of cost. So, labor cost = required production x cost per unit x percentage of cost where the required production for the month of October is given by: required production = desired ending inventory - beginning inventory and desired ending inventory = sales forecast + safety stock Note: Round up sales forecast and safety stock to the nearest unit