Consider the following information: Each unit sells for $500. Regular production and overtime...

Consider the following information:  Each unit sells for $500. Regular production and overtime production costs are $350 and $450 per unit, respectively.  The cost to hold a unit in inventory for one month is $10. 

a. (**) Develop a cash flow analysis for this problem. Be sure to calculate net cash flow and cumulative net cash flow for each month.  

b. (**) Why do the net cash flows for April and May look so much better than those for the other months? What are the implications for building up and draining down inventories under a level production plan? 

MONTH	FORECASTED SALES	REGULAR PRODUCTION	OVERTIME PRODUCTION	ENDING INVENTORY
January	800 units	1150 units	0 units	350 units
February	1000	1150	0	500
March	1200	1150	0	450
April	1400	1150	0	200
May	1600	1150	150	0
June	1500	1150	350	0