Gerald Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of A1 and 30 units of A2. The ending inventory of A1 is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months. Based on this information, the number of units of A1 that needs to be purchased by Gerald during the first month is

Question

Quizplus · Accepted Answer

To calculate the number of A1 units needed for the first month: Required for production = 1,000 books * 10 units of A1 = 10,000 units. Beginning inventory = 4,000 units. Planned decrease in inventory = 500 units. Therefore, units to be purchased = 10,000 - 4,000 + 500 = 6,500 units.

Gerald Company Manufactures Books