Figure 8-3 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.
Refer to Figure 8-3. How many units of wood are expected to be used in production during the second month?

Question

Quizplus · Accepted Answer

To determine the amount of wood expected to be used in production during the second month, we need to calculate the total amount of wood required for the 600 scheduled units of buggies, subtract the expected increase in steel inventory (5 units) and then subtract the planned decrease in wood inventory (500 units).

Total wood required for 600 units = 20 units of wood per unit x 600 units = 12,000 units of wood
Expected increase in steel inventory = 5 units
Planned decrease in wood inventory = 500 units

Wood used in production during second month = 12,000 - 5 - 500 = 11,495 units (rounded to nearest whole unit)

Therefore, the closest answer to 11,495 is D) 12,000 units.

Figure 8-3 Roaming Vehicles Company Manufactures Buggies