Question

Wright Lighting Fixtures forecasts its sales in units for the next four months as follows:
March ............................. 4,000
April ............................... 10,000
May ................................ 8,000
June ............................... 6,000
Wright maintains an ending inventory for each month in the amount of one and one-half times the expected sales in the following month. The ending inventory for February (March’s beginning inventory) reflects this policy. Materials cost $7 per unit and are paid for in the month after production. Labor cost is $3 per unit and is paid for in the month incurred. Fixed overhead is $10,000 per month. Dividends of $14,000 are to be paid in May. Eight thousand units were produced 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.



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  • CreatedOctober 14, 2014
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