Answer Happy

Cummings, a multi-million-dollar corporation, has been
accumulating operating data in order to prepare an annual profit
plan. Details regarding Cummings sales for the first six months of
the year are as follows:
Collection pattern for credit sales

Month of sales 30%
One month following sale 40%
Second month following sale 25%

Cummings cost of goods sold average 40% of the sales value.
Cummings objective is to maintain a target inventory equal to 30%
of the next month's sales. Purchases of merchandise for resale are
paid for in the month following the sale.

The variable operating expenses (other than Cost of goods sold) for
Cummings are 10% of sales and are paid for in the month following
the sale. The annual fixed operating expenses are presented below.
All of these are incurred uniformly throughout the year and paid
monthly except for insurance and property taxes. Insurance is paid
quarterly in January, April, July and October. Property taxes are
paid twice a year in April and October:

Annual Fixed Operating Costs
Determine the total cash disbursements that Cummings Corporation
will make for the operating expenses during the month of April