What is the production cash outflow for the month of September 2014 production?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Ee 412.

Production cash outflow. California Cement Company produces its products two months in advance of anticipated
sales and ships to warehouse centers the month before sale. The inventory safety stock is 20% of the anticipated
month's sale. Beginning inventory in September 2014 was 32,637 units. Each unit costs $2.87. The average sales
price per unit is $5.81. The cost is made up of 32% labor, 62% materials, and 6% shipping (to the warehouse). The
company pays for labor the month of production, shipping the month after production, and raw materials the month prior
to production. What is the production cash outflow for products produced in the month of September 2014, and in what
months does it occur? Note: September production is based on November anticipated sales. The following are the
fourth-quarter sales for 2014: $1,795,000 (October), $1,623,000 (November), and $2,066,000 (December).
What is the production cash outflow for the month of September 2014 production?
The labor cost is $. (Round to the nearest dollar.)
Transcribed Image Text:Production cash outflow. California Cement Company produces its products two months in advance of anticipated sales and ships to warehouse centers the month before sale. The inventory safety stock is 20% of the anticipated month's sale. Beginning inventory in September 2014 was 32,637 units. Each unit costs $2.87. The average sales price per unit is $5.81. The cost is made up of 32% labor, 62% materials, and 6% shipping (to the warehouse). The company pays for labor the month of production, shipping the month after production, and raw materials the month prior to production. What is the production cash outflow for products produced in the month of September 2014, and in what months does it occur? Note: September production is based on November anticipated sales. The following are the fourth-quarter sales for 2014: $1,795,000 (October), $1,623,000 (November), and $2,066,000 (December). What is the production cash outflow for the month of September 2014 production? The labor cost is $. (Round to the nearest dollar.)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Receivables Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education