High School

A company requires 220 pounds of plastic to meet the production needs of a product. It currently has 25 pounds of plastic in inventory. The desired ending inventory of plastic is 70 pounds. How many pounds of plastic should be budgeted for purchasing during the coming period?

Options:
A. 195 pounds
B. 265 pounds
C. 245 pounds
D. 175 pounds

Answer :

To determine how many pounds of plastic should be budgeted for purchasing, we need to calculate how much plastic is required to meet the production needs and the desired ending inventory, while taking into account the current inventory.

Here's how you can calculate it step-by-step:

  1. Determine the total plastic requirement:

    The company needs 220 pounds for production.

  2. Add the desired ending inventory:

    The company wants to end the period with 70 pounds of plastic.

    [tex]\text{Total needs} = 220 + 70 = 290 \text{ pounds}[/tex]

  3. Subtract the current inventory:

    The company already has 25 pounds in inventory.

    [tex]\text{Plastic to be purchased} = 290 - 25 = 265 \text{ pounds}[/tex]

Therefore, the company should budget for purchasing 265 pounds of plastic.

The correct multiple-choice option is: 265 pounds.

Other Questions