Question

cNally Corporation makes a special ski. Next year, McNally expects to produce 20,000 pairs of skis. Seven pounds of fiberglass are required to make each pair of skis. The company expects to have 21,000 pounds of fiberglass in inventory at the end of this year and next year wants to have an ending inventory of fiberglass of 18,000 pounds. How much fiberglass does the company expect to purchase n

Answer 1

Answer:

Purchases= 137,000 pounds

Explanation:

Giving the following information:

Production= 20,000 pairs of skis.

Required material per unit= 7 pounds

Beginning inventory= 21,000 pounds

Desired ending inventory= 18,000 pounds.

To calculate the direct material purchase, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

Production= 20,000*7= 140,000 pounds

Purchases= 140,000 + 18,000 - 21,000

Purchases= 137,000 pounds