Question

Alpha manufactures chairs, and each requires 4 board feet of lumber. Alpha expects that 1,500 and 1,700 chairs will be built in April and May, respectively. Alpha keeps lumber on hand at 40% of the next month's production needs. Use this information to determine number board feet of lumber that Alpha Company: (Round & enter final answers to: the nearest whole dollar for total dollar answers, nearest penny for unit costs or nearest whole number for units.)

1. should buy in April
2. have for desired March ending raw material inventory

Answer 1

Instructions are below.

Step-by-step explanation:

Giving the following information:

Standard direct material quantity= 4 board feet of lumber.

Production:

April= 1,500

May= 1,700

Alpha keeps lumber on hand at 40% of the next month's production needs.

To determine the purchase needed for each month, we need to use the following formula:

Purchases= sales + desired ending inventory - beginning inventory

April:

Purchase= (1,500*4) + (1,700*4)*0.4 - (1,500*4)*0.4

Purchase= 6,320 board feet.

Ending inventory March= (1,500*4)*0.4= 2,400 baord feet.

Ending inventory April= (1,700*4)*0.4= 2,720 board feet.