Bright Lights Company manufactures lamps.The estimated lamp sales for the last three months of the current year are as follows: 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?
$$\begin{array} { l r }
\text { Month } & \text { Sales } \
\text { October } & 10,000 \
\text { November } & 13,000 \
\text { December } & 15,000
\end{array}$$

Question

Bright Lights Company manufactures lamps.The estimated lamp sales for the last three months of the current year are as follows: 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?
$$\begin{array} { l r } 
\text { Month } & \text { Sales } \
\text { October } & 10,000 \
\text { November } & 13,000 \
\text { December } & 15,000
\end{array}$$

Quizplus · Accepted Answer

To calculate the number of lamps to be produced in November, we need to consider the sales for November and the desired ending inventory for November, which is 25% of December's sales. Ending inventory for November = 15,000 * 25% = 3,750. Beginning inventory for November is the ending inventory of October, which is 25% of November's sales = 13,000 * 25% = 3,250. Therefore, lamps to be produced = November sales + Ending inventory - Beginning inventory = 13,000 + 3,750 - 3,250 = 13,500 lamps.

Bright Lights Company Manufactures Lamps A)10,500 Lamps B)11,000 Lamps C)13,500 Lamps D)14,000 Lamps

Bright Lights Company Manufactures Lamps A)10,500 Lamps
B)11,000 Lamps
C)13,500 Lamps
D)14,000 Lamps