b. The matrix company is planning on purchasing some items for the production of bitumen for the surfacing of road, they have provided you with the following information for your use: A summary of the information needed to complete this task is given as follows: Quantity of material purchased = 3,000 units Value of material purchased = Ghc 9,000 Standard quantity of material required per tonne of output = 30 units Standard rate of material = Ghc2.50 per unit Opening stock of materials = Nil Closing stock of material = 500 units Output during the period = 80 tons Required; Determine the following variances using the information above i. Material cost variance ii. Material price variance iii. Material usage variance Major Topic Investment Appraisal Blooms Designation Score 3+3+4= EV 7 Question 6 A company manufactures a product from a raw material, which is purchased at Ghc54 per kg. The company incurs a handling cost of Ghc350 plus freight of Ghc400 per order. The incremental carrying cost of inventory of raw material is Ghc. 0.50 per kg per month. In addition, the cost of working capital finance on the investment in inventory of raw material is Ghc8 per kg per annum. The annual production of the product is 94,500 units and 2 units are obtained from one kg of raw material. Required: i. EV(2) Calculate the economic order quantity of raw materials. ii. Advise, how frequently should orders for procurement be placed. EV(2) iii. If the company proposes to rationalize placement of orders on quarterly basis, EV(2)