Merriweather Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Merriweather, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 20 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40% of next month's sales are in the finished goods inventory. Merriweather also purchases sufficient raw materials (legs) to ensure that raw materials (legs) inventory is 60% of the following month's scheduled production needs. Merriweather's sales budget in units for the next quarter is as follows: (CMA adapted) July 2,500 August 2,700 September 2,300 Merriweather's ending inventories in units for June 30 are: Finished goods 2,100 Raw materials (legs) 4,200 Assume the required production for August and September is 1,800 units and 2,000 units, respectively, and the July 31 raw materials (legs) inventory is 4,400 units. The number of table legs to be purchased in August is: A. 6,800 B. 7,600 C.10,200 D.7,200
*Merriweather Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Merriweather, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 20 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40% of next month's sales are in the finished goods inventory. Merriweather also purchases sufficient raw materials (legs) to ensure that raw materials (legs) inventory is 60% of the following month's scheduled production needs. Merriweather's sales budget in units for the next quarter is as follows: (CMA adapted)
|
July |
2,500 |
|
August |
2,700 |
|
September |
2,300 |
Merriweather's ending inventories in units for June 30 are:
|
Finished goods |
2,100 |
|
Raw materials (legs) |
4,200 |
Assume the required production for August and September is 1,800 units and 2,000 units, respectively, and the July 31 raw materials (legs) inventory is 4,400 units. The number of table legs to be purchased in August is:
A. 6,800
B. 7,600
C.10,200
D.7,200
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