Define the production cash outflow

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Reference no: EM131585841

Production cash outflow.National Beverage Company produces its products two months in advance of anticipated sales and ships to warehouse centers the month before sale. The inventory safety stock is 14% of the anticipated? month's sale. Beginning inventory in October 2014 was 263,008 units. Each unit costs $0.28 to make. The average selling price is $0.69 per unit. The cost is made up of 45% labor, 44% materials, and 11% shipping? (to the? warehouse). The company pays for labor the month of? production, shipping the month after? production, and raw materials the month prior to production. What is the production cash outflow for products produced in the month of October? 2014, and in what months does it? occur?Note:October production is based on December anticipated sales. The? fourth-quarter sales forecasts are as? follows:

$1,922,000 (October)

?$2,170,000 (November)

?$2,129,000 (December)

Reference no: EM131585841

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