Ultravision Inc. anticipates sales of $420,000 from January through April. Materials will represent 50 percent of sales, and because of level production, material purchases will be equal for each month during the four months of January, February, March, and April. Materials are paid for one month after the month purchased. Materials purchased in December of last year were $38,000 (half of $76,000 in sales). Labor costs for each of the four months are slightly different due to a provision in the labor contract in which bonuses are paid in February and April. The labor figures are: January February March $28,000 31,000 28,000 33,000 April Fixed overhead is $24,000 per month. Prepare a schedule of cash payments for January through April. (Assume the $420,000 of sales occur equally over the four months of January through April, i.e. Monthly sales = $420,000 / 4.)

Ultravision Inc. anticipates sales of $420,000 from January through April. Materials will represent 50 percent of sales, and because of level production, material purchases will be equal for each month during the four months of January, February, March, and April. Materials are paid for one month after the month purchased. Materials purchased in December of last year were $38,000 (half of $76,000 in sales). Labor costs for each of the four months are slightly different due to a provision in the labor contract in which bonuses are paid in February and April. The labor figures are: January February March $28,000 31,000 28,000 33,000 April Fixed overhead is $24,000 per month. Prepare a schedule of cash payments for January through April. (Assume the $420,000 of sales occur equally over the four months of January through April, i.e. Monthly sales = $420,000 / 4.)

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 1PROB

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