ACC 206 Week 4 Chapter 6 Exercise 4 Production and cash-outlay computations
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Chapter 6 Exercise 4
4. Production and cash-outlay computations
RPR, Inc., anticipates that 120,000 units of product K will be sold during May. Each unit of product K requires four units of raw material A. Actual inventories as of May 1 and budgeted inventories as of May 31 follow.
4. Production and cash-outlay computations
RPR, Inc., anticipates that 120,000 units of product K will be sold during May. Each unit of product K requires four units of raw material A. Actual inventories as of May 1 and budgeted inventories as of May 31 follow.
1-May | 31-May | |
Product K (Units) | 55,000 | 60,000 |
Rate Materials A (Units) | 40,000 | 37,000 |
Each unit of raw material A costs $8; RPR pays for all purchases in the month of acquisition. Invoices that account for 80% of the cost of materials acquired will be paid within 10 days of receipt, entitling the company to a 2% cash discount.
a. Determine the number of units of product K to be manufactured in May.
b. Compute the May cash outlay for purchases of raw material A.
July | August | September | |
Beginning cash balance | $10,000 | $ ? | $ ? |
Add: Cash receipts | 50,000 | 63,000 | 71,000 |
Deduct: Cash payments | -64,000 | -58,000 | -64,000 |
Cash excess (deficiency) before financing | ($4,000) | $ ? | $ ? |
Financing | |||
Borrowing to maintain minimum balance | ? | ? | ? |
Principal repayment | ? | ? | ? |
Interest payment | ? | ? | ? |
Ending cash balance | $ ? | $ ? | $ ? |
11 years ago
ACC 206 Week 4 Chapter 6 Exercise 4 Production and cash-outlay computations
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