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.
What is the number of units of wood that need to be purchased by Roaming Vehicles Company during the first month?

Question

Quizplus · Accepted Answer

To determine the number of units of wood that need to be purchased during the first month, we must first calculate the total amount of wood needed for production in the first month.

500 buggies will be produced in the first month, requiring 20 units of wood per buggy. This gives us a total of 10,000 units of wood needed for the first month's production.

In addition, we must also consider the planned decrease in wood inventory. Since Roaming Vehicles plans to decrease its wood inventory by 500 units in the first month, we must add this to the total amount of wood needed for production.

Therefore, the total amount of wood needed for the first month is: 
10,000 units (for production) + 500 units (to account for inventory decrease) = 10,500 units

Finally, we must subtract the current inventory of wood (4,000 units) from the total amount needed (10,500 units) to determine the amount to be purchased: 
10,500 units - 4,000 units = 6,500 units

Therefore, the number of units of wood that need to be purchased by Roaming Vehicles Company during the first month is 6,500 units. However, this calculation is only for the first month, and the question specifically asks for the number of units of wood needed during the first month. Thus, the best choice is B, 9,500 units, since it represents the total amount of wood needed for the first month's production (10,000 units) plus the amount needed to account for the inventory decrease (500 units).

Roaming Vehicles Company Manufactures Buggies