Problem 10.37A Lyon Factory Ltd. manufactures two products: chairs and stools. Each chair requires 3 m of upholstery and 4 kg of steel. Each stool requires 2 m of upholstery and 5 kg of steel. Upholstery costs $2 per metre and steel costs $5 per kilogram. Lyon Factory expects inventories at January 1, 2020, to be as follows: Chairs Steel Stools 15 units Upholstery 75 m 26 units 150 kg Inventories of raw materials should not be allowed to fall below the amounts given as at January 1, 2020. 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 of the year 2020 is as follows: Chairs Stools January 104 units 60 units February 116 units 76 units March 76 units 60 units Calculate the cash disbursements in February for purchases of steel. DROP DOWN OPTION #1 OPTION #2 Production Requirements Add Steel requirements for January and February Chairs Jan Feb Stools Jan Feb Budgeted Sales Less V Steel Per Unit Beginning Inventory Ending Inventory Steel Required For Production Production Needs Quantity of purchases in January and February Jan DROP DOWN OPTIONS Production Requirements Feb Budgeted Sales Steel Per Unit Beginning Inventory Ending Inventory Cost of purchases in January and February Jan Feb Steel Required For Production Steel purchases rounded to purchasing lots Production Needs Cost per kilogram Total cost for steel purchases $ Cash disbursements for February Current month $ Month following $