Determine the number of units of product

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Production and cash-outlay computations

RPR, Inc., anticipates that 120,000 units of product K will be sold during May. Each unit of product K requires four units of raw material A. Actual inventories as of May 1 and budgeted inventories as of May 31 follow.


1-May

31-May

Product K (Units)

  55,000

  60,000

Rate Materials A (Units)

  40,000

  37,000

Each unit of raw material A costs $8; RPR pays for all purchases in the month of acquisition. Invoices that account for 80% of the cost of materials acquired will be paid within 10 days of receipt, entitling the company to a 2% cash discount.

a. Determine the number of units of product K to be manufactured in May.

b. Compute the May cash outlay for purchases of raw material A.


July

August

September

Beginning cash balance

$10,000

$ ?

$ ?

Add: Cash receipts

50,000

63,000

71,000

Deduct: Cash payments

-64,000

-58,000

-64,000

Cash excess (deficiency) before financing

($4,000)

$ ?

$ ?

Financing




Borrowing to maintain minimum balance

?

?

?

Principal repayment

?

?

?

Interest payment

?

?

?

Ending cash balance

$ ?

$ ?

$ ?

Reference no: EM13343695

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