Question

Bombs Away Video Games Corporation has forecasted the following monthly sales:

Answer 1

Answer:

I have attached the excel file which shows the entire calculation of all the parts of your question. Majority of the numbers are linked so that its easy for you to understand. Key points before you look into file.

1) Number of units have derived by dividing revenue over sales price per unit which is $5

2) Production units are calculated by dividing total sales unit by 12 (as mentioned in the question)

3)Keep in mind that 80% of revenue will be received next month of the sales therefore also include in January sales receipt the 80% revenue of previous month

Explanation:

Download xlsx

Answer 2

Answer:

please find the answer below

Explanation:

(a) Annual sales = $816, 000

Selling price = $5

Hence, number of units to be sold in a year = $816, 000 / $5

= 163, 200

Monthly production = 163, 200 / 12

= 13, 600 units

Month Production and inventory schedule:

Month Sales ($) Sales (units) Beginning inventory Production  Ending inv

Jan   105, 000 21, 000  30, 000 13, 600 22, 600

Feb   98, 000   19, 600  22, 600 13, 600 16, 600

Mar   30, 000  6, 000  16, 600 13, 600 24, 200

Apr   30, 000  6, 000  24, 200 13, 600 31, 800

May   25, 000  5, 000  31, 800 13, 600 40, 400

Jun   40, 000  8, 000  40, 400 13, 600 46, 000

Jul   50, 000  10, 000  46, 000 13, 600 49, 600

Aug   50, 000  10, 000  49, 600 13, 600 53, 200

Sep   60, 000  12, 000  53, 200 13, 600 54, 800

Oct    90, 000  18, 000  54, 800 13, 600 50, 400

Nov   110, 000  22, 000  50, 400 13, 600 42, 000

Dec   128, 000  25, 600  42, 000 13, 600 30, 000

(b) Schedule of cash receipts:

Mon

Sales

‘000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Dec 100 80,000            

Jan 105 21,000 84,000          

Feb 98  19,600 78,400          

Mar 30   6,000 24,000        

Apr 30    6,000 24,000        

May 25     5,000 20,000      

Jun 40      8,000 32,000      

Jul 50       10,000 40, 000    

Aug 50        10, 000 40, 000    

Sep 60         12, 000 48,000  

Oct 90          18,000 72,000  

Nov 110           22,000 88,000

Dec 128            25,600

Total 101,

000 103,  

600 84,  

400 30, 000 29,  

000 28, 000 42, 000 50,  

000 52, 000 66,  

000 94,  

000 113,  

600

(c) Cash payment schedule

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Product-

ion  

costs 27, 200 27, 200 27, 200 27, 200 27, 200 27, 200 27, 200 27, 200 27, 200 27, 200 27, 200 27, 200

Other  

Costs 50, 000 50, 000 50, 000 50, 000 50, 000 50, 000 50, 000 50, 000 50, 000 50, 000 50, 000 50, 000

Total

costs 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200

(d) Cash Budget

Jan

Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Dec

Opening

balance 5, 000 28, 800 55, 200 62, 000 14, 800 -32, 400 -80, 600 -129,

000 -165, 000 -192, 200 -217, 400 -200, 600

Cash  

receipts 101, 000 103, 600 84, 000 30, 000 30, 000 29, 000 28, 000 42, 000 50, 000 52, 000 94, 000 113, 600

Cash  

Payments 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200 77, 200

Closing

Balance 28, 800 55, 200 62, 000 14, 800 -32, 400 -80, 600 -129, 800 -165, 000 -192, 200 -217, 400 -200,600 -164, 200

Minimum

Balance

    5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000

Bank loan     27, 400 75, 600 124, 800 160, 000 187,

200 214, 400 195, 600 159, 200