Question

Carter Production, INC.’s required production for the first six months of the year is as follows.MONTHREQUIRED PRODUCTIONJANUARY50,000FEBRUARY70,000MARCH85,000APRIL105,000MAY110,000JUNE120,000Each unit requires two pounds of material. Given a desired ending inventory of 20% of next month’s production needs, the pounds of material to be purchased in April is:
a.(105,000 x 2)= 210,000
b. 110,000 x 2 x 20%= 44,000
c. 85,000 x 20%=42,000
d. =212,000

Answer 1

Answer:

D) =212,000

Explanation:

MONTH         REQUIRED PRODUCTION

JANUARY                    50,000

FEBRUARY                  70,000

MARCH                        85,000

APRIL                          105,000

MAY                             110,000

JUNE                          120,000

The number of units to be produced during April = total projected sales - (20% of April's projected sales) + (20% of may's projected sales) = 105,000 - (105,000 x 20%) + (110,000 x 20%) = $106,000 units

Amount of materials needed for the production of 106,000 units = 106,000 units x 2 pounds per unit = 212,000 pounds