Roaming Vehicles Company manufactures buggies. Manufacturing a buggy takes 20 un

Question

Roaming Vehicles Company manufactures buggies. Manufacturing a buggy takes 20 units of wood and 1 unit of steel. Scheduled production of buggies for the next two months is 500 and 600 units, respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory of wood is planned to decrease 500 units in each of the next two months, and the steel inventory is expected to increase 5 units in each of the next two months.

How many units of steel are expected in the material inventory at the end of the second month?

Explanation / Answer

Ans) ending steel inventory = 40 units

Calculation:

Beginning steel inventory balance. = 30 units

Add: increase in inventory 5 units per month = 10 units

Ending inventory (30units+10units) = 40 units

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