Finished goods inventory at the end of September was 3,000 units. Ending finished goods inventory is budgeted to equal 25 percent of the next month's sales. Asian Lamp expects to sell the lamps for $25 each. January sales is projected at 16,000 lamps. In going from the sales budget to the production budget, adjustments to the sales budget need to be made for

b. finished goods inventories,

Explanation:

To be able to come up with the Production budget, the sales budget will need to be adjusted for finished goods inventories to come up with the total production figure.

For instance:

                                            Production Budget

Sales in units                                                                XXX

Add Ending finished goods inventories                    XXX

Less Opening finished goods inventories                (XXX)

Production units for period                                        XXX

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