Question

The Porch Cushion Company manufactures foam cushions. The number of cushions to be produced in the upcoming three months​ follows: Number of foam cushions to be produced in July 12 comma 000 Number of foam cushions to be produced in August 10 comma 000 Number of foam cushions to be produced in September 5 comma 000 Each cushion requires 2 pounds of the foam used as stuffing. The company has a policy that the ending inventory of foam each month must be equal to 20​% of the following​ month's expected production needs. How many pounds of foam does The Porch Cushion Company need to purchase in​ August?

Answer 1

The Porch Cushion Company needs to purchase 22,000 pounds in​ August

Step-by-step explanation:

Number of foam cushions to be produced in July = 12,000

Number of foam cushions to be produced in August = 10,000

Number of foam cushions to be produced in September = 5,000

Opening Inventory = 20% of (10,000×2) = 4,000 pounds

Closing Inventory = 20% of (5,000×2) =2,000 pounds

Pounds required to produce foam cushions in August = 10,000 × 2 = 20,000

No of pounds required to purchase = 20,000 + 4,000 - 2,000

= 22,000 pounds