Little Red Company manufactures wooden wagons. To manufacture a wagon, it takes

Question

Little Red Company manufactures wooden wagons. To manufacture a wagon, it takes 10 units of wood and 1 unit of steel. Scheduled production of wagons for the next two months is 500 and 600 units, respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory of wood is planned to decrease 500 units each of the next two months, and the steel inventory is expected to increase 7 units each of the next two months. How many units of steel are expected in the raw materials inventory at the end of the second month?

Select one:

A. 45 units

B. 90 units

C. 44 units

D. 60 units

Explanation / Answer

C. 44 Units

Units of steel expected in the raw materials inventory at the end of the second month:

= 30 + 7 + 7

= 44 Units

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