The Ace Battery Company has forecast its sales in units as follows: January 1,700 May February 1,550 June March April 1,500 July 2,000 Ace always keeps an ending Inventory equal to 110 percent of the next month's expected sales. The ending Inventory for December (January's beginning Inventory) is 1,870 units, which is consistent with this policy. Materials cost $12 per unit and are paid for in the month after production. Labour cost is $5 per unit and is paid in the month the cost is Incurred. Overhead costs are $10,500 per month. Interest of $8,900 is scheduled to be paid in March, and employee bonuses of $14,100 will be paid in June. a. Prepare a monthly production schedule for January through June. (Enter all values as positive value.) Ace Battery Company Production Schedule Forecasted unit sales Desired ending inventory Beginning inventory Units to be produced 2,250 2,400 2,100 Units produced Material cost Labour cost Overhead cost Interest Employee bonuses Total cash payments January December February b. Prepare a monthly summary of cash payments for January through June. Ace produced 1,500 units in December. Ace Battery Company Summary of Cash payments February March $ January March $ April May $ $ June April $ May July $ June
The Ace Battery Company has forecast its sales in units as follows: January 1,700 May February 1,550 June March April 1,500 July 2,000 Ace always keeps an ending Inventory equal to 110 percent of the next month's expected sales. The ending Inventory for December (January's beginning Inventory) is 1,870 units, which is consistent with this policy. Materials cost $12 per unit and are paid for in the month after production. Labour cost is $5 per unit and is paid in the month the cost is Incurred. Overhead costs are $10,500 per month. Interest of $8,900 is scheduled to be paid in March, and employee bonuses of $14,100 will be paid in June. a. Prepare a monthly production schedule for January through June. (Enter all values as positive value.) Ace Battery Company Production Schedule Forecasted unit sales Desired ending inventory Beginning inventory Units to be produced 2,250 2,400 2,100 Units produced Material cost Labour cost Overhead cost Interest Employee bonuses Total cash payments January December February b. Prepare a monthly summary of cash payments for January through June. Ace produced 1,500 units in December. Ace Battery Company Summary of Cash payments February March $ January March $ April May $ $ June April $ May July $ June
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Ace Battery Company has forecast its sales in units as follows:
January 1,700 May
February 1,550 June
March
April
1,500 July
2,000
Ace always keeps an ending Inventory equal to 110 percent of the next month's expected sales. The ending Inventory for December
(January's beginning Inventory) is 1,870 units, which is consistent with this policy.
Materials cost $12 per unit and are paid for in the month after production. Labour cost is $5 per unit and is paid in the month the cost is
Incurred. Overhead costs are $10,500 per month. Interest of $8,900 is scheduled to be paid in March, and employee bonuses of
$14,100 will be paid in June.
a. Prepare a monthly production schedule for January through June. (Enter all values as positive value.)
Ace Battery Company
Production Schedule
Forecasted unit sales
Desired ending inventory
Beginning inventory
Units to be produced
2,250
2,400
2,100
Units produced
Material cost
Labour cost
Overhead cost
Interest
Employee bonuses
Total cash payments
January
December
February
b. Prepare a monthly summary of cash payments for January through June. Ace produced 1,500 units in December.
Ace Battery Company
Summary of Cash payments
February
March
$
January
March
$
April
May
$
$
June
April
$
May
July
$
June
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