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 wood are expected to be used in production during the second month?

Question

Quizplus · Accepted Answer

To calculate the units of wood expected to be used in production during the second month, we need to calculate the total units of wood used in production during the two-month period and then subtract the units of wood used in the first month.

Total units of wood used in production = (20 units of wood per buggy) × (500 buggies in the first month + 600 buggies in the second month) = 22,000 units of wood.

Units of wood used in the first month = (20 units of wood per buggy) × (500 buggies in the first month) - (500 units of wood in ending inventory) + (4,000 units of wood in beginning inventory) = 14,500 units of wood.

Therefore, units of wood expected to be used in production during the second month = Total units of wood used in production - Units of wood used in the first month 
= 22,000 units of wood - 14,500 units of wood 
= 7,500 units of wood.

Thus, the answer is D) 12,000 units.

Roaming Vehicles Company Manufactures Buggies