Question

Tucker Company makes chairs. Tucker has the following production budget for January - March.
January February March
Units Produced 9666 11971 9743
Each chair produced uses 4 board feet of wood. Management wants ending inventory levels of raw materials to equal 20% gf the production needs (in wood) for the next month.
How many board feet of wood does Tucker need to purchase in February? Round your answer to the nearest whole number.

Answer 1

Answer: 46,101 board feet of wood

Explanation:

Purchases can be calculated using the formula;

Purchases = Total Production Needs + Ending Inventory - Beginning Inventory

Total Production Needs

= Units produced * boards required per unit

= 11,971 * 4

= 47,884 units needed.

Ending Inventory.

This should be 20% of production needs for the next month

= 20% * (9,743 * 4)

= 7,794 units

Beginning Inventory

This will be the ending inventory of January. The ending inventory of January is 20% of February needs.

= 20% * 47,884

= 9,577 units.

Purchases for February = 47,884 + 7,794 - 9,577

= 46,101 board feet of wood