Q.4per kg. The company incurs a handling cost of Rs. 370 plus freight of Rs. 380 per order. TheA company manufactures a product from a raw material which is purchased at Rs. 80Rs. 12 per kg per annum. The annual production of the product is 1,00,000 units and 2.5 unitsaddition, the cost of working capital finance on the investment in inventory of raw material isincremental carrying cost of inventory of raw material is Rs. 0.25 per kg per month. Inare obtained from 1 kg of raw material.Required:(i)(ii)(iii)Calculate economic order quantity of raw material.Advise that how frequently order for procurement should be placed.If the company proposes to rationalize placement of orders on quarterly basis,what percentage of discount in the price of raw materials should be negotiated?Assume 360 in a year.Answers:Ordering costInv. Carrying costEOQFrequency of ordersDiscount requiredRs. 750Rs. 152,000 Units18 days@1.50%; Rs. 48,000

1. Calculate economic order quantity of raw material.EOQ = √(2 * Annual Demand * Ordering Cost /…

Answered: Q.4 per kg. The company incurs a…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4CDQ: How would each of the following costs be classified if units produced is the activity base? a....

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5. Expected annual Usage of materials is 2,000,000 units, and per order quantity is 10,000 units. The invoice cost of each unit is Rs.500, and the cost to place on purchase order is Rs.80. Total Cost: А. 8million В. 16million С. zero D. None of the above 6. Based on the information in (5), the estimated annual order cost is: А. Rs.16,000 В. Rs.100,000 Rs.32,000 С. D. Rs.50,000
37 Shipping expense is P9,000 for 8,000 pounds shipped and P11,250 for 11,000 pounds shipped. Assuming that this activity is within the relevant range, if the company ships 9,000 pounds, its expected shipping expense is closest to (nearest peso):
The following are the annual costs of Peter Corp. relating to Material A which required 40,000 units per year: Unit Cost Insurance cost $20 Storage cost 32 Freight in 36 Order cost 10 Interest that could have been earned on the alternative investment of funds $320,000 What is the annual carrying cost per unit?
An asset with its purchasing price of Rs. 530,000 was imported from its manufacturing place holding Rs. 80,000 as carrying cost. Installation charges for that asset are Rs, 27,500. Tax paid to the government is 30% of its total cost till it gets ready and useful for business operations. Manager’s fee was also paid of Rs. 30,000. Annuity value for one rupee is 0.3178. Interest rate was given at 8%. Depreciate the asset for 5 years using SLM annuity method
This year, Lambert Company will ship 1,500,000 pounds of goods to customers ata cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 ofrevenue (total revenue is $20 million), the amount of shipping cost assigned to thecustomer by using ABC would bea. unable to be determined.b. $8,000 ($0.80 per pound shipped).c. $24,000 (2% of the shipping cost).d. $12,000 (1% of the shipping cost).e. None of these.
Vernon Corporation incurs the following annual fixed costs. Item Cost $ 52,000 120,000 85,000 9,000 Depreciation officers' salaries Long-term lease Property taxes Required Determine the total fixed cost per unit of production, assuming that Vernon produces 1,500, 2,000, or 2,500 units. (Round your answers to 2 decimal places.) Units Produced 1,500 2,000 2,500 Fixed cost per unit
This year, Lambert Company will ship 1,500,000 pounds of goods to customers at a cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 of revenue( total revenue is $20million), The amount of shipping cost assigned to the customer by using ABC would be a. Unable to be determined. b.$8,000($0.80per pound shipped) c.$24, 000(2% of the shipping cost) d. $12,000(1% of the shipping cost) e. None of these
From the following information prepare a statement showing the estimatedworking capital requirement:(1)Projected annual sales 36,000 units(2)Analysis of salesRaw materials Rs. 6 per unitLabour Rs. 4 per unitOverhead Rs. 3 per unitProfit Rs. 2 per unitSelling price Rs. 15 per unit(3)Additional Information :(a) Raw material in stock 1 month(b)Production process 2 months(c) Finished goods in store 3 months(d)Credit allowed to debtors 4 months(e) Credit allowed by suppliers 2 months(f) Monthly wages and expenses are paid twice on 1st and 16th of each month.(g)Production is carried on evenly during the year and expenses and wages accruesimilarly.(h)Cash is to be kept at 10% of the net working capital.
Subject :- Accounting
13. R Ltd. will produce 3,00,000 kgs. of X and 6,00,000 kgs. of Y from an input of 9,00,000 kgs. of a raw material Z. The selling price of X is 78 per kg. and that of Y is 6 per kg. Following additional information is available: Processing cost amount to 54,00,000 per month as under; Raw material Z,9,00,000 kgs. at 3 per kg. Variable Processing Cost Fixed Processing Cost Ž 27,00,000 18,00,000 * 9,00,000 Ž 54,00,000 Total Cost There is an offer to purchase 60,000 kgs. additionally at a price of 4 per kg. The existing market for Y will not be affected by accepting the offer. But the price of X is likely to be decreased uniformly on all sales. Find the minimum reduced average price for X, to sustain the increased sales.
Jojo Sdn Bhd ordered from Koko Sdn Bhd a piece of specialised heavy equipment for its operations.Details of cost incurred are:RMPurchase price500,000Import duty12,000Engineer’s fees (for inspection and installation)10,000Shipping and transport costs6,000Site preparation costs:Direct labour costs5,000Concrete reinforcement4,000Maintenance and service contract for 1 year3,000Jojo Sdn Bhd received a trade discount of 10% on list price and 5% cash discount on early settlement.Jojo Sdn Bhd obtained a loan of RM500,000 to finance the purchase. Interest expense on the loan for the year was RM25,000.The equipment has a useful life of 5 years. Jojo Sdn Bhd estimates that dismantling cost to be RM3,500 and legal obligation to restore the site is RM6,500. Both these values are stated in present values.Required:Calculate the initial cost of the plant. Your answer should explain the reasons why some of the costs are not included in the calculation.
Q.4) REX Co. Ltd. is to start production on 1st January 2018. The prime cost of a unit is expected to be Rs. 40 (Rs. 16 per materials and Rs. 24 for labour). In addition, variable expenses per unit are expected to be Rs. 8 and fixed expenses per month Rs. 30,000. Payment for materials is to be made in the month following the purchase. One-third of sales will be for cash and the rest on credit for settlement in the following month. Expenses are payable in the month in which they are incurred. The selling price is fixed at Rs. 80 per unit. The number of units to be produced and sold is expected to be: January 900; February 1200; March 1800; April 2000; May 2,100 June 2400 Required: Draw a Cash Budget indicating cash requirements from month to month.

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