Production Cash Outflow for October 2014 Production
What is the production cash outflow for the month of October 2014 production?
The production cash outflow for products produced in October 2014 can be calculated by considering the costs of labor, raw materials, and shipping for the anticipated sales in December 2014. What is the total production cash outflow and in what months does it occur?
Production Cash Outflow Calculation
To calculate the production cash outflow for October 2014 production, we need to consider the costs of labor, raw materials, and shipping. Let's break down the calculation:
- Labor Cost: $229,912.82
- Raw Materials Cost: $299,282.40
- Shipping Cost: $78,052.18
Production Cash Outflow Breakdown
The production cash outflow for products produced in October 2014 is $607,247.40. This cash outflow occurs in different months for each expense:
- Labor cost is incurred in October 2014.
- Raw materials cost is paid in September 2014.
- Shipping cost is paid in November 2014.
Understanding the timing of these costs is crucial for effective cash flow management and production planning.