Question

Comfy Inc. uses five yards of wool in each blanket it produces. Comfy’s production budget next year is 30,000 blankets. The anticipated wool inventory at January 1 is 30,000 yards, but the company desires to reduce the inventory to 20,000 yards by the end of the year. Each yard of wool costs $10. How many yards of wool should Comfy purchase?

Answer 1

wool purchased = 140,000 yards

Step-by-step explanation:

given data

wool in each blanket = five yards

production budget = 30,000 blankets

beginning inventory = 30,000 yards

Ending inventory = 20,000 yards

wool costs = $10

to find out

How many yards of wool should Comfy purchase

solution

we get first production in yards that is

production in yards = 30,000 × 5

production in yards = 150,000

and

wool purchased will be

wool purchased = production - ( beginning inventory - Ending inventory)

wool purchased = 150,000 - ( 30000 - 20000 )

wool purchased = 140,000 yards