Towson Company manufactures book cases, and each requires 20 board feet of lumber

Accounting Oct 06, 2020

Towson Company manufactures book cases, and each requires 20 board feet of lumber. Towson expects that 1,900 and 1,650 book cases will be built in June and July, respectively. Towson keeps lumber on hand at 30% of the next month's production needs. Use this information to determine number board feet of lumber that Towson Company should buy in June. (Round & enter final answers to the nearest whole number.)

Expert Solution

Computation of Number Board Feet of Lumber that Towson Company should buy in June:

Expected production in June = 1,900 book cases

Lumber Required per unit = 20 board feet

So,

Lumber required for production (1,900*20) = 38,000 board feet

Add: Desired Closing Stock (30%*1,650*20) = 9,900 board feet

Less: Opening Stock (38,000*30%) = 11,400 board feet

Board feet required to bought in June = 36,500 board feet

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