Question

Calculator Excellent Company manufactures lamps. The estimated number of lamp sales for three months are as follows: Month Sales August 12,000 September 16,000 October 15,000 Finished goods inventory at the end of July was 3,600 units. Ending finished goods inventory is budgeted as 30% of the next month's sales. Excellent expects to sell the lamps for $30 each. In November, sales are projected at 18,000 lamps. How many lamps should be produced in September? a.11,000 lamps b.10,500 lamps c.14,000 lamps d.15,700 lamps

Answer 1

September production = 15,700 lamps

Step-by-step explanation:

given data

Month Sales

August 12,000

September 16,000

October 15,000

goods inventory = 3,600 units

goods inventory budgeted = 30%

sell the lamps = $30 each

sales projected = 18,000 lamps

to find out

many lamps should be produced

solution

first we get here Beginning inventory that is

Beginning inventory = (0.3 × 16000)

Beginning inventory = 4800

and

ending inventory is = (0.3 × 15000)

ending inventory = 4500

so September production is

September production = September sales + Ending inventory - Beginning inventory ...............1

September production = 16,000 +4500 - 4800

September production = 15,700 lamps