The Gadget Company Manufactures a Wrist Watch for Spy Agencies

The Gadget Company manufactures a wrist watch for spy agencies. The watch has a built-in cell phone, Geiger counter, compass, magnet and garroting wire. Sales are expected to commence in February and remain level at 10,000 units per month. The watch sells for $2 per unit. The raw materials for the product cost $1 per unit. Raw materials are purchased one month before the expected sales, and suppliers are paid one month after the purchase. Gadget's overhead expenses are $3,750 per month and depreciation is $250 per month. What are total cash outflows (disbursements) in May? Sales and Disbursements Forecast
The Gadget Company
$$\begin{array} { | l | c | c | c | } \hline & \text { April } & \text { May } & \text { June } \\\hline \text { Sales Forecast } & \$ 20,000 & \$ 20,000 & \$ 20,000 \\\hline \text { Purchases from } & & & \\\text { Suppliers } & & & \\\hline \text { Payments to Suppliers } & & & \\\hline \begin{array} { l } \text { General \& Admin } \\\text { Expenses }\end{array} & & & \\\hline \text { Depreciation } & & & \\\hline \text { Total Disbursements } & & & \\\hline\end{array}$$

A) $10,000
B) $12,950
C) $13,750
D) $13,850
E) $20,000