Lyon Factory Ltd$.$ manufactures two products: chairs and stools. Each chair requires $3$ m of

upholstery and $4$ kg steel. Each stool requires $2$ m of upholstery and $5$ kg of steel. Upholstery costs

$$2$ per meter and steel costs $$5$ per kilogram.

Lyon Factory expects inventories at January $1,2024,$ to be as follows:

Chairs Stools Upholstery

$25$ units $15$ units $75$ m

Inventories of raw materials should not be allowed to fall below the amounts given as at January $1,$

$2017.$ Inventories of finished furniture at the beginning of each month should be enough to cover

$25\%$ of the anticipated sales for that month. Upholstery is ordered in units of $100$ m and steel in

units of $50$ kg$.$

Half of the materials purchased are paid for in the month of purchase and the other half in

the following month.

The sales budget for the first three months for the year $2024$ is as follows:

January February March

Chairs $100$ units $120$ units $80$ units

Stools $60$ units $80$ units $60$ units

HINT $-$ Remember start with sales and production budgets start with finished goods units.

Use the information provided to answer the following questions:

a$)745$ kilograms of steel is required for January's actual production and $815$ kilograms of steel is

required for February's actual production. How many kilograms of steel will Lyon Factory Ltd$.$ need

to purchase for January and February?

b$)$ What is the expected total cost of the steel purchases in January and February?

c$)$ What is the expected cash disbursement in February for purchases of steel? please give me step by step solution in text and explain me the question and please answer it as soon as possible