Question

Wright Lighting Fixtures forecasts its sales in units for the next four months as follows: March April May June 31,000 33,000 30,500 29,000 Wright maintains an ending Inventory for each month in the amount of three times the expected sales in the following month. The ending Inventory for February (March's beginning inventory) reflects this policy. Materials cost $8 per unit and are paid for in the month after production. Labor cost is $12 per unit and is paid for in the month incurred. Fixed overhead is $24,500 per month. Dividends of $22,500 are to be paid in May. The firm produced 30,000 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 0 $ 0 $

Answer 1

Production Schedule
	March	April	May	June
Projected Unit Sales	31,000	33,000	30,500	29,000
Desired Ending Inventory	99,000	91,500	87,000
Total units required	130,000	124,500	117,500
Beginning Inventory	93,000	99,000	91,500
Units to be produced	37,000	25,500	26,000
Cash Payments
	February	March	April	May
Units produced	30,000	37,000	25,500	26,000
Material Cost		240,000	296,000	204,000
Labor Cost		444,000	306,000	312,000
Fixed Overhead		24,500	24,500	24,500
Dividend				22,500
Total Cash Payments		708,500	626,500	563,000
Note: Ending Inventory of one month becomes beginning inventory of next