Reference no: EM132547403

Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% of credit sales are collected. The remainder is collected two months after the sale. It takes 4 kilograms of direct material to produce a finished unit, and direct materials cost $5 per kilogram. All direct materials purchases are on account, and are paid as follows: 40% in the month of the purchase, 50% the following month, and 10% in the second month following the purchase. Ending direct materials inventory for each month is 40% of the next month's production needs. January's beginning materials inventory is 1,080 kilograms. Suppose that both accounts receivable and accounts payable are zero at the beginning of January.

                       January           February            March               April

Sales             $26,400              $23,100       $33,000         $25,000
Production in units  990             1,440            1,710             1,200

Question 1: The ending balance in accounts payable for March is: 

• $21,168
• $30,120
• $65,832
• $18,072