Intermediate

(a) Write short notes to explain each of the following in the context of materials control:

(i) Continuous stocktaking.

(ii) Perpetual inventory system.

(iii) ABC inventory analysis. (9 marks)

(b) State the factors that should influence the decision regarding economic order quantities ofraw materials. (7 marks)

(c) Calculate three normal control levels, which may be used in stock control systems, from the following information for a particular raw material:

Economic order quantity, 12000 kilos Lead time, 10 to 14 working days Average usage, 600 kilos per day Minimum usage, 400 kilos per day Maximum usage, 800 kilos per day

(9 marks) (Total 25 marks) ACCA Level 1 Costing LO1