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    Sales Forecast & Production Schedule for Boswell Corporation

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    The Boswell Corporation forecasts its sales in unit for the next four months:

    Sales Forecast
    March 6,000
    April 8,000
    May 5,500
    June 4,000

    Boswell maintains an ending inventory each month in the amount of one-and-one-half times the expected sales for the following month. The ending inventory for February (March's beginning inventory) reflects this policy. Materials cost $5 per unit and are paid the month following production. Labor cost is $10 per unit and is paid the month of production. Fixed overhead is $12,000 per month. Dividends of $20,000 are paid in May. Five thousand (5,000) units were produced in February.

    Produce a production schedule and a summary of cash payments for March, April, and May. Remember that production in any one month is equal to sales plus the desired inventory minus the beginning inventory for the month

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    Solution Preview

    The Boswell Corporation forecasts its sales in unit for the next four months:

    Sales Forecast
    March 6,000
    April 8,000
    May 5,500
    June 4,000

    Boswell maintains an ending inventory each month in the amount of one-and-one-half times the expected sales for the following month. The ending inventory for February (March's beginning inventory) reflects this policy. ...

    Solution Summary

    This solution is comprised of a detailed explanation to produce a production schedule and a summary of cash payments for March, April, and May.

    $2.19

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