Bright Lights Company manufactures lamps.The estimated lamp sales for the last three months of the current year are as follows: $$\begin{array} { l r }
\text { Month } & \text { Sales } \
\text { October } & 10,000 \
\text { November } & 13,000 \
\text { December } & 15,000
\end{array}$$ Finished goods inventory at the end of September was 3,000 units.Ending finished goods inventory is budgeted to equal 25% of the next month's sales.Bright Lights expects to sell the lamps for $25 each.The first three months of the next year's sales are projected at 16,000 lamps.How many lamps should be produced in November?

Question

Bright Lights Company manufactures lamps.The estimated lamp sales for the last three months of the current year are as follows: $$\begin{array} { l r } 
\text { Month } & \text { Sales } \
\text { October } & 10,000 \
\text { November } & 13,000 \
\text { December } & 15,000
\end{array}$$ Finished goods inventory at the end of September was 3,000 units.Ending finished goods inventory is budgeted to equal 25% of the next month's sales.Bright Lights expects to sell the lamps for $25 each.The first three months of the next year's sales are projected at 16,000 lamps.How many lamps should be produced in November?

Quizplus · Accepted Answer

To calculate the number of lamps to be produced in November, we need to consider the sales for November, the desired ending inventory for November, and the beginning inventory for November. The ending inventory for November should be 25% of December's sales, which is 0.25 * 15,000 = 3,750 lamps. The beginning inventory for November is the ending inventory for October, which is 0.25 * 13,000 = 3,250 lamps. Therefore, the production for November is calculated as: November sales (13,000) + ending inventory for November (3,750) - beginning inventory for November (3,250) = 13,500 lamps.

Bright Lights Company Manufactures Lamps Finished Goods Inventory at the End of September Was 3,000