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 May31 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.
Determine the number of units of product K to be manufactured in May. Compute the May cash outlayfor 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
$ ?
$ ?
$ ?