Question

The Porch Cushion Company manufactures foam cushions. The number of cushions to be produced in the upcoming three months​ follows:
Number of foam cushions to be produced in July 13, 000
Number of foam cushions to be produced in August 12, 000
Number of foam cushions to be produced in September 14, 000

Each cushion requires 2 pounds of the foam used as stuffing. The company has a policy that the ending inventory of foam each month must be equal to 25% of the following​ month's expected production needs. How many pounds of foam does The Porch Cushion Company need to purchase in​ August?

(A) 18,000
(B) 25, 000
(C) 30,000
(D) 31, 000

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Number of foam cushions to be produced in July 13, 000

Number of foam cushions to be produced in August 12, 000

Number of foam cushions to be produced in September 14, 000

Each cushion requires 2 pounds of the foam used as stuffing. The company has a policy that the ending inventory of foam each month must be equal to 25% of the following​ month's expected production needs.

Production for August:

Sales= 12,000*2= 24,000

Ending inventory= (14,000*0.25)*2= 7,000

Beginning inventory= (12,000*0.25)*2= 6,000 (-)

Total= 25,000 pounds