90.2K

Verified Solution

Link Copied!

please answer asap

Consider the following information. Each unit selis for $700. Regular production and overtime production costs are $550 and $650 per unit, respectively. The cost to hold a unit in imventory for one month is $20. Click the icon to view the production information. a. Develop a cash flow analysis for this problem. Fill in the table below (enter your responses as whole numbers and include a minus sign if necessary) b. Why do the net cash flows for April and May look so much better than those for the other months? What are the implications for building up and draining down inventories under a levol production plan? \begin{tabular}{lcccc} \hline \multicolumn{1}{c}{ Month } & \begin{tabular}{c} Forecasted \\ sales \end{tabular} & \begin{tabular}{c} Regular \\ production \end{tabular} & \begin{tabular}{c} Overtime \\ production \end{tabular} & \begin{tabular}{c} Ending \\ inventory \end{tabular} \\ \hline January & 600 & 950 & 0 & 350 \\ February & 800 & 950 & 0 & 500 \\ March & 1,000 & 950 & 0 & 450 \\ April & 1,200 & 950 & 0 & 200 \\ May & 1,400 & 950 & 250 & 0 \\ June & 1,300 & 950 & 250 & 0 \\ \hline \end{tabular} b. Why do tine fict cast Hows for April and May look so much better than those for the other montis? What are the implications for building up and draining down imventories under a level production plan? The net cash fows for April and May are much higher than the other months because the number of units sold is much than the number of units produced. The implications of building up and draining down inventory are that the production costs high although inventory costs may be

Answer & Explanation Solved by verified expert

See Answer