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17 November, 21:24

The Porch Cushion Company manufactures foam cushions. The number of cushions to be produced in the upcoming three months follows: Number of foam cushions to be produced in July 12 comma 000 Number of foam cushions to be produced in August 10 comma 000 Number of foam cushions to be produced in September 5 comma 000 Each cushion requires 2 pounds of the foam used as stuffing. The company has a policy that the ending inventory of foam each month must be equal to 20 % of the following month's expected production needs. How many pounds of foam does The Porch Cushion Company need to purchase in August?

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  1. 17 November, 21:57
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    The Porch Cushion Company needs to purchase 22,000 pounds in August

    Explanation:

    Number of foam cushions to be produced in July = 12,000

    Number of foam cushions to be produced in August = 10,000

    Number of foam cushions to be produced in September = 5,000

    Opening Inventory = 20% of (10,000*2) = 4,000 pounds

    Closing Inventory = 20% of (5,000*2) = 2,000 pounds

    Pounds required to produce foam cushions in August = 10,000 * 2 = 20,000

    No of pounds required to purchase = 20,000 + 4,000 - 2,000

    = 22,000 pounds
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