Question

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?

Answer 1

Lamps should be produced in September are 15,700 lamps

Step-by-step explanation:

Lamps should be produced in September = number of lamp sales for September + Lamps at the end of September - Lamps at the beginning of September

Lamps at the end of September = 30% x number of lamp sales for October = 30% x 15,000 = 4,500 lamps

Lamps at the beginning of September = Lamps at the end of August = 30% x number of lamp sales for September = 30% x 16,000 = 4,800 lamps

Lamps should be produced in September = 16,000 + 4,500 - 4,800 = 15,700 lamps