Knowledge Test Questions 3.6.1 What are the consequences to a business of holding a very low a level of inventory? 3.6.2 DNA Ltd sells 4000 drums of grease each year. The inventory holding cost of one drum of grease is R8. The cost of placing an order for stock is estimated at R250. 3.6.3 Calculate the EOQ for drums of grease. Calculate the number of orders that should be placed per annum. (Round off calculations to the nearest whole number.) 3.6.4 You are the newly appointed management accountant at Kelso Industries. The company uses the EOQ model to determine the quantity of raw material Z54 to order from REM Lid. The following details regarding raw material Z54 are brought to your attention: Kelso Industries consumes 2400 units of material Z54 each working day. - It is estimated that there are 250 working days in the 20.7 financial year. - The cost of placing an order amounts to R120. - The cost of holding irventory per unit is estimatod at R3,90 plun 11\% of te invice pice per unit. - The invoice price per unit is R10. REQUIRED 3.6.5 Calculate the EOQ for raw material Z54 for the 20.7 financia year. 3.6.6 Calculate the number of orders that should be placed during 20.7. (Round oli caiaititions to the nearest whole number.) 3.6.7 The following transactions of CAN Manufacturers took plase during June 20.8 in respect of a raw material M321 used in production: Required Use the FIFO method and weighted average cost methods to complete the tables Anat inrlude the issue price to production and the value of closing inventary