Question

The manager of Bonita’s Pottery Company believes that the company will sell 820 place settings of pottery dinnerware next month. She expects to have 100 place settings in finished goods inventory at the beginning of the month and would like to have 260 place settings in ending inventory. Each place setting requires 3 kilograms of clay. The manager expects to have 720 kilograms of clay on hand at the beginning of the month, but she would like to decrease ending inventory to 540 kilograms. How many kilograms of material will need to be purchased to meet these requirements?

Material required to be purchased kgs_____

Answer 1

Answer: 2,760 Kgs

Explanation:

Computation of Number of Finished Goods to be Produced

Particulars
Number of units to be sold	820 units
Add: Desired Ending Inventory of Finished Goods	260 units
Less: Beginning Inventory of Finished Goods	100 units
Number of Finished Goods to be Produced	980 units

Computation of Materials to be Purchased

Particulars
Number of Finished Goods to be Produced (See above table)	980 units
Materials needed per unit of Finished Goods	3 Kgs
Total Materials needed for Production (980*3)	2,940 kgs
Add: Desired Ending Inventory of Materials	540 kgs
Less: Beginning Inventory of Materials	720 kgs
Materials needed to be Purchased	2,760 kgs