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.
-Refer to Figure 8-3.What is the number of units of wood that need to be purchased by Bug Company during the first month?
A) 1,000 units
B) 9,500 units
C) 500 units
D) 10,000 units

Question

Quizplus · Accepted Answer

To calculate the wood needed for the first month:  - Required for production: 500 buggies * 20 units of wood = 10,000 units  - Beginning inventory: 4,000 units  - Planned decrease in inventory: 500 units  Thus, wood needed to be purchased = 10,000 - 4,000 + 500 = 9,500 units.

Figure 8-3 Bug Company Manufactures Buggies