Maxim Motors Ltd sells various vehicle spare parts located in Tsumeb.One of its flagship product is a gasket that is mostly used by bakkies.The gaskets are purchased from a local manufacturer situated in Walvis Bay. The following information has been made available by the procurement and sales departments: Quarter 2020 Units purchased Cost per unit Total purchases (N$) Units sold 1 300 30 9 oo0 300 2 400 35 14 oo0 300 3 400 36 14 400 300 300 37 11 100 300 1 400 48 500 1 200 Inventory at the beginning of 1st quarter was 500 units at N$29 per unit and Inventory at end of 4th quarter was 700 units. Based on inventory reports for the last 5 years, the delivery period for gaskets has between 1 to 2 weeks and on average the Maxim motors sales were between 200 to 300 gaskets per quarter. REQUIRED: 2.1 Using the FIFO method, calculate the cost of goods sold 2.2 Using the LIFO method, calculate the cost of goods sold 2.3 What is the gross profit for the year based on FIFO cost of sales figure given a margin of 20%?
Maxim Motors Ltd sells various vehicle spare parts located in Tsumeb.One of its flagship product is a gasket that is mostly used by bakkies.The gaskets are purchased from a local manufacturer situated in Walvis Bay. The following information has been made available by the procurement and sales departments:
|
Quarter 2020 |
Units purchased |
Cost per unit |
Total purchases (N$) |
Units sold |
|
1 |
300 |
30 |
9 oo0 |
300 |
|
2 |
400 |
35 |
14 oo0 |
300 |
|
3 |
400 |
36 |
14 400 |
300 |
|
|
300 |
37 |
11 100 |
300 |
|
|
1 400 |
|
48 500 |
1 200 |
Inventory at the beginning of 1st quarter was 500 units at N$29 per unit and Inventory at end of 4th quarter was 700 units. Based on inventory reports for the last 5 years, the delivery period for gaskets has between 1 to 2 weeks and on average the Maxim motors sales were between 200
to 300 gaskets per quarter.
|
REQUIRED: |
|
|
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2.1 |
Using the FIFO method, calculate the cost of goods sold |
|
|
2.2 |
Using the LIFO method, calculate the cost of goods sold |
|
|
2.3 |
What is the gross profit for the year based on FIFO cost of sales figure given a margin of 20%? |
|
|
2.4 |
Re-order level |
|
|
2.5 |
Minimum inventory level. |
|
|
2.6 |
Name any three documents involved in inventory control. |
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