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Question 1 A factory requires 2000 units of certain material for a year. Cost of carrying one unit of this material is OMR 1 per
Question 1 A factory requires 2000 units of certain material for a year. Cost of carrying one unit of this material is OMR 1 per annum and it is estimated that the expenses of placing an order and receiving would be OMR 10. Calculate (i) Economic Order Quantity and (ii) Number of orders per year. (2 marks) Question 2 You are required to compute (1) Economic ordering quantity and (ii) Frequency of the orders in terms of days, from the data given below: Consumption of Material per annum OMR 8,000 Ordering costs per order OMR 25 Storage and carrying cost per annum 10% of inventory value. (2 marks) Question 3 The following information is available in respect of component D20: Maximum stock level 42,000 units Budgeted consumption : Maximum 7500 units per month Minimum 4000 units per month Estimated delivery period: Maximum 4 months Minimum 2 months You are required to calculate: i. Re-order level. ii. Re-order quantity. (3 marks) Question 4 Two components X and Y are used as follows: Normal usage 600 units per week each Maximum usage 900 units per week each Minimum usage 300 units per week each Reorder quantity: X 4,800 units Y 7,200 units Reorder Period: X 4 to 6 weeks Y 2 to 4 weeks. Calculate for each component X and Y: (i) Maximum level ii) Average stock level. (3 marks) Question 5 Answer the question given below: The running of most businesses is severely affected during this pandemic globally and production activities are quite disturbed'. As a Cost Accountant, how do you think Cost reduction and Cost control could play an effective role in controlling the costs of an enterprise? Elaborate this statement and justify your
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