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Tucker Company makes chairs. Tucker has the following production budget for January - March. January February March Units Produced 9,646 10,993 8,559 Each chair produced uses 5 board feet of wood. Management wants ending inventory levels of raw materials to equal 20% of the production needs (in wood) for the next month. How many board feet of wood does Tucker need to purchase in February

Respuesta :

abiolataiwo2015

The amount of board feet of wood that Tucker need to purchase in February is 52,531 Board feet.

First step

Board feet needed for production in February = Production units x Board feet per unit

Board feet needed for production in February = 10,993 x 5

Board feet needed for production in February = 54,965

Second step

Ending inventory in raw materials in January= 54,965 x 20%

Ending inventory in raw materials in January=10,993 board feet

Third step

Board feet needed production in March = 8,559  x 5

Board feet needed production in March =42,795

Ending inventory of raw materials in February =42,795x 20%

Ending inventory of raw materials in February =8,559

Fourth step

Ending inventory to raw materials in January is the beginning inventory of February.  

Purchases in February = 54,965+8,559-10,993

Purchases in February =52,531 Board feet

Inconclusion the amount of board feet of wood that Tucker need to purchase in February is 52,531 Board feet.

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