Prepare a monthly production schedule and a monthly summary

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The Volt Battery Company has forecast its sales in units as follows: January 800 February 650 March 600 April 1,100 May 1,350 June 1,500 July 1,200. Volt Battery always keeps an ending inventory equal to 120 percent of the next months expected sales. The ending inventory for December ( January's beginning inventory) is 960 units, which is consistent with this policy.

Materials cost $12 per unit and are paid for in the month after purchase. Labor costs is $5 per unit and is paid in the month after purchase. Labor cost is $5 per unit and is paid in the month the cost is incurred. Overhead costs are $6,000 per month. Interest of $8000 is scheduled to be paid in March and employee bonuses of $13,200 will be paid in June.

Prepare a monthly production schedule and a monthly summary of cash payments for January thru June . Volt produced 600 units in December.

 

Reference no: EM13294070

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