Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. dan jones is cfo for a newly formed manufacturing

Dan Jones is CFO for a newly formed manufacturing company. Below is the...

60.1K

Verified Solution

Question

Accounting

Dan Jones is CFO for a newly formed manufacturing company. Below is the anticipated monthly production for the first six months of operation. Dan is interested in learning which of the first six months will require cash outlays of more than $40,000 toward the purchase of materials. Each unit requires 10 pounds of material at $6 per pound. All material is purchased in the month prior to its expected use. Purchases are paid for 15% in the month of purchase, 40% in the month following the month of purchase, and 45% in the second month following the month of purchase.

Which months will require cash outlays in excess of the $40,000 amount? Does the production in any given month necessarily correspond to the cash flow for that same month? What are the business implications of your observation?

UNITS

Purchasing Activity (Month prior to production)

Total Pounds

Total materials cost

 Paid in Month Paid in Month Relating to Prior Month Paid in Month Relating to Two Months Prior Total
January 600
February 800

March 900
April 400
May 500
June 550
Total

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

Dipole moment of the arrangement of the charges shown in figure is 9 a 3q...

Basic Math
1.2K views

Ann invested 12 000 in two bank accounts One of the accounts pays 6 annual...

Basic Math
1.2K views

0 1 pt 399 Details Suppose that 39 of students in a college have a...

Basic Math
1.2K views

Given the function f(x) =6x^4 - x + x - 42x + 7.There are real...

Statistics
1.2K views

A paper described the results of a medical study in which one treatment was shown...

Algebra
1.2K views

Chapters 14 15 16 i 02 27 15 Calculate the average daily balance assume a...

Accounting
1.2K views

Flexible Budget Variance Actual Flexible Budget 12,800 Volume...

Accounting
1.2K views

Sxample \#1 Bob \& Bobbi would like to buy a home. Bob makes $10.50 per...

Accounting
1.2K views

summarized the whole article in one page. discuss the purpose of the study, Research methodology...

Accounting
1.2K views

Your client has returned to you the representation letter that they sent to their lawyer....

Accounting
1.2K views

The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 50,000...

Accounting
1.2K views

An investment will pay $20,500 at the end of the first year, $30,500 at the...