Question 2

2.1 REQUIRED

Use the information given below to calculate the net value of issues to the production department for October 2018 and the value of closing inventory as 31 October 2018 using the:

2.1.1 First in First Out method

2.1.2 Weight Average Cost Method (Note: Round off weighted cost per unit to the nearest cent)

INFORMATION

The following information for October 2018 was extracted from the records of Cannes Limited, a manufacturing company that uses the periodic inventory system, for an inventory item that it requires in production:

Date Transaction details

01 Opening inventory: 3 000 units @ $ 10 each

04 Invoice received for 47 000 units @ $ 11 each

08 Returned 5 000 damaged units (purchased 04 October 2018) to the supplier

13 Invoice received for 30 000 units at $ 13 each

27 Invoice received for 25 000 units $ 15 each

31 Transferred 74 000 units to the production department during October 2018

2.2 REQUIRED

Study the information given below and calculate the cost (as a percentage) to Jip stores of not accepting the discount. (Round off your answer to two decimal places)

INFORMATION

Camry Wholesalers' credit terms to Jip stores are 30 days but the supplier is prepared to allow a 2% rebate if Jip stores pays the account within 15 days.

2.3 REQUIRED

Study the information given below and calculate the EOQ

Adis Manufacturers requires 100 000 units of raw materials annually from an outside supplier. The material costs $ 72 per unit. The holding costs amounts to $ 4 per unit and the ordering cost is $ 25 per order.