Question

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

January $113,000 July $58,000
February 106,000 August 58,000
March 38,000 September 68,000
April 38,000 October 98,000
May 33,000 November 118,000
June 48,000 December 136,000

Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit to produce. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by 12. Of each month's sales, 40 percent are for cash and 60 percent are on account. All accounts receivable are collected in the month after the sale is made.

Required:
Construct a monthly production and inventory schedule in units. Beginning inventory in January is 38,000 units.

Answer 1

Answer:

Bombs Away Video Games Corporation

Production and Inventory Schedule

                Sales Units Production units Ending Units

Beginning inventory                                      38,000

January           22,600        15,200               30,600

February          21,200        15,200               24,600

March                7,600        15,200                  1,800

April                   7,600        15,200                9,400  

May                   6,600        15,200               18,000

June                 9,600        15,200              23,600

July                  11,600        15,200              27,200

August            11,600        15,200               30,800

September    13,600        15,200               32,400

October        19,600        15,200               28,000

November   23,600        15,200                19,600

December   27,200        15,200                 7,600

Explanation:

a) data and Calculations:

Sales Budget (

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