Question

If there were 50000 pounds of raw materials on hand on January 1, 140000 pounds are desired for inventory at January 31, and 530000 pounds are required for January production, how many pounds of raw materials should be purchased in January?

Answer 1

Answer:

Purchases= 620,000 pounds

Explanation:

Giving the following information:

Beginning inventory= 50,000 pounds

Desired ending inventory= 140,000 pounds

Production= 530,000 pounds

To calculate the purchase required, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

Purchases= 530,000 + 140,000 - 50,000

Purchases= 620,000 pounds