Loft Company has the following information for next month: planned production of 20,000 units which require 3 gallons of Material A each; beginning inventory of Material A of 4,800 gallons; desired ending inventory of Material A of 6,000 gallons. How much material A needs to be purchased?

Question

Quizplus · Accepted Answer

The total material A needed for production is 20,000 units * 3 gallons/unit = 60,000 gallons. To achieve the desired ending inventory of 6,000 gallons, considering the beginning inventory of 4,800 gallons, the total material A needed is 60,000 gallons (for production) + 6,000 gallons (desired ending inventory) - 4,800 gallons (beginning inventory) = 61,200 gallons.

Loft Company Has the Following Information for Next Month: Planned