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Prepare monthly summary of cash payments

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Question - The Prince Albert Corporation has forecast the following sales for the first seven months of the year.

January $26,000

February 28,000

March 30,000

April 36,000

May 26,000

June 32,000

July 34,000

Monthly material purchases are set equal to 20 percent of forecasted sales for the next month. Of the total material costs, 30 percent are paid in the month of purchase and 70 percent are paid in the following month. Labour costs will run $5,600 per month, and fixed overhead is $10,000 per month. Interest payments on the debt will be $4,600 for both March and June. Finally, the Prince Albert sales people will receive a 1.0 percent commission on total sales for the first six months of the year, to be paid on June 30.

Required - Prepare monthly summary of cash payments for the six months from January through June.

Reference no: EM132846088

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