Question

In: Accounting

germ D chemicals has 40, 000 pounds of krypton in inventory at the beginning of August....

germ D chemicals has 40, 000 pounds of krypton in inventory at the beginning of August. The company plans to produce 6000 rack joint made from Krypton in August. If each rack joint requires 30 pounds of Krypton and germ D wants 50,000 pounds of krypton in inventory at the end of August how many pounds of krypton should the company plan to purchase in August?

Solutions

Expert Solution

Answer)

Calculation of pounds of Krypton that the company should purchase in the month of August

Quantity of Krypton to be purchased = Quantity of Krypton required to produce 6,000 rack joint + Desired ending inventory of Krypton – Beginning inventory of Krypton

                                                               = 180,000 pounds + 50,000 pounds – 40,000 pounds

                                                               = 190,000 pounds

Therefore the company should purchase 190,000 pounds of Krypton in the month of August.

Working Note:

Calculation of Quantity of Krypton to be purchased

Total quantity of Krypton to be purchased = Quantity of Krypton required per rack joint X Number of rack joints budgeted to be produced in August

                                                                                   = 30 pounds X 6,000 rack joints

                                                                                    = 180,000 pounds

ekkarill92 answered 2 years ago
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