Wright Lighting Fixtures forecasts its sales in units for the next four months as follows:...
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Finance
Wright Lighting Fixtures forecasts its sales in units for the next four months as follows:
March
30,000
April
32,000
May
29,500
June
28,000
Wright maintains an ending inventory for each month in the amount of two and one-half times the expected sales in the following month. The ending inventory for February (Marchs beginning inventory) reflects this policy. Materials cost $7 per unit and are paid for in the month after production. Labor cost is $11 per unit and is paid for in the month incurred. Fixed overhead is $24,000 per month. Dividends of $22,400 are to be paid in May. The firm produced 29,000 units in February.
Complete a production schedule and a summary of cash payments for March, April, and May. Remember that production in any one month is equal to sales plus desired ending inventory minus beginning inventory.
Wright Lighting Fixtures Production Schedule March April May June Projected unit sales Desired ending inventory Total units required Beginning inventory Units to be produced Cash Payments February March April May Units produced Material cost Labor cost Fixed overhead Dividends Total cash payments
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