What SUP
Operating Cash Payments Budget Jan Feb Mar Total
Operating cash payments
Product sales revenue 150,000 165,000 175,000 490,000
Purchases
Cost of expected sales 90,000 99,000 105,000 294,000
Required ending inventory 49,500 52,500 54,000 54,000
Assumptions
Beginning inventory 75,000
Required ending inventory 50%
Cost of expected sales 60%
Product sales expected in April 180,000
Beginning accounts payable 15,000
Pct. of purchases paid in current month 90%
Pct. of purchases paid in subsequent month 10%
Beginning inventory (75,000) (49,500) (52,500) (75,000)
Subsequent monthly payments 15,000 6,450 10,200 31,650
Cash payments for purchases 73,050 98,250 106,050 277,350
Selling expenses 6,000 7,000 8,000 21,000
General and administrative expenses 40,000 40,000 40,000 120,000
Operating cash payments 119,050 145,250 154,050 418,350