Wright maintains an ending inventory for each month in the amount of one and one-half times the expected sales in the following
month. The ending inventory for February (March’s beginning inventory) reflects this policy. Materials cost $5 per unit and are paid for in the month after production. Labor cost is $9 per unit and is paid for in the month incurred. Fixed overhead is $13,000 per month. Dividends of $20,200 are to be paid in May. The firm produced 7,000 units in February.
1 answer:
<u>Explanation:</u>
In the above problem the cash payments of wright corporation is given. From which the production schedule and summary of payments for the month of March, April and May are calculated.
The inventory of the given month is taken as 1.5 times the projected sales for the next month. Material cost and labor cost is given per unit cost on the projected sale for last month.
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Answer:
$119.56
Explanation:
We will use compound interest formula to solve this problem.
The formula is:
Where
F is the future value
P is the present amount
r is the rate of interest per period
t is the number of periods
Here,
F is the value we want, after 3 years
P is the present amount, $100
r is the rate of interest per quarter (per period)
Given r = 6% annually, so that would make:
6%/4 = 1.5% per quarter, or 1.5/100 = 0.015
Also, t is the number of quarters in 3 years, that would be 4*3 = 12
Now, substituting, we get our answer:
The first answer choice is right, $119.56