Question

Depotissimo " , has predicted the following sales for the first four months of 2015 January...

Depotissimo " , has predicted the following sales for the first four months of 2015

January

$ 6,000

March

$    15,000

February

$ 11,000

April

$    17,000

Monthly purchases of raw materials accounts for 60 % of sales forecast for the next month.

Of total raw material purchases , payments are 60% in cash in the same month and 40% on credit. Of credit purchases 70% is paid in the following month and 30% is paid in two months.

Predicted costs for the company during this period are: Labor $ 1,000 per month , fixed overhead costs of $600 per month.

Two Interest payments on the debt of $650 each will be made  in January and February.

Finally , at the end of the month of March sales staff receive a commission of 3 % of total sales for the first three months of the year and to be paid on March 30.

Calculate the final cash outflows in the month of February ?

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1. Final cash outflows in the month of February -

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