Figure 8-3 Bug Company manufactures buggies.Manufacturing a buggy takes 20 units of wood and 1 unit of steel.Scheduled production of buggies for the next two months is 500 and 600 units, respectively.Beginning inventory is 4,000 units of wood and 30 units of steel.The ending inventory of wood is planned to decrease 500 units in each of the next two months, and the steel inventory is expected to increase 5 units in each of the next two months.
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Refer to Figure 8-3.How many units of wood are expected to be used in production during the second month?
A) 12,500 units
B) 10,000 units
C) 15,000 units
D) 12,000 units

Question

Quizplus · Accepted Answer

To calculate the total units of wood to be used in the second month, we need to consider the following: 
- Scheduled production of buggies in the second month = 600 units 
- Units of wood required per buggy = 20 units 
- Ending inventory of wood planned to decrease by 500 units

So, the total units of wood to be used in the second month = (600 x 20) + 4000 - 500 
= 12,000 units

Therefore, the best choice is D (12,000 units).

Figure 8-3 Bug Company Manufactures Buggies