Regular production costs $13 per unit and selling a unit represents a cash inflow of $28 per unit. Assume that all units reflected on the forecast will be sold. What is the cumulative net cash flow through March? $$\begin{array} { | l | c | c | }
\hline{ \text { Month } } & \text { Forecast } & \text { Regular Production } \
\hline \text { Tanuary } & 250 & 250 \
\hline \text { February } & 200 & 200 \
\hline \text { March } & 300 & 300 \
\hline \text { April } & 400 & 400 \
\hline
\end{array}$$
A)$11,250
B)$4,500
C)$8,400
D)$3,900

Question

Regular production costs $13 per unit and selling a unit represents a cash inflow of $28 per unit. Assume that all units reflected on the forecast will be sold. What is the cumulative net cash flow through March? $$\begin{array} { | l | c | c | } 
\hline{ \text { Month } } & \text { Forecast } & \text { Regular Production } \
\hline \text { Tanuary } & 250 & 250 \
\hline \text { February } & 200 & 200 \
\hline \text { March } & 300 & 300 \
\hline \text { April } & 400 & 400 \
\hline
\end{array}$$
A)$11,250
B)$4,500
C)$8,400
D)$3,900

Quizplus · Accepted Answer

The cumulative net cash flow through March is calculated by finding the net cash flow for each month (selling price per unit - production cost per unit) multiplied by the number of units, then summing these amounts for January through March. The net cash flow per unit is $28 - $13 = $15. For January through March: (250 units + 200 units + 300 units) * $15 = 750 units * $15 = $11,250.

Regular Production Costs $13 Per Unit and Selling a Unit